Merced Corporation Is Considering Adding a New Product Line

question 91

Multiple Choice

Merced Corporation is considering adding a new product line. Market research indicates that sales revenue for the new line would be $80,000 for 35,000 units. Variable costs would be $1.70 per unit; direct fixed costs, $0.40 per unit; and indirect fixed costs, $0.50 per unit. If Merced added the new line, its income would:

• A) Increase by $20,500
• B) Increase by $6,500
• C) Decrease by $5,000
• D) Decrease by $11,000

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Definitions:

Send

The act of causing something to go or be taken from one place or person to another, especially in the context of communication or transportation.

Oligodendrocytes

Oligodendrocytes are a type of glial cell in the central nervous system responsible for producing myelin, a substance that insulates nerve cell axons to improve the speed and efficiency of electrical impulse conduction.

Schwann Cells

Schwann cells are a type of glial cell that wrap around nerve fibers in the peripheral nervous system, forming the myelin sheath that helps in the rapid transmission of neural signals.

Glial Cells

Cells that provide support for the neurons to grow on and around, deliver nutrients to neurons, produce myelin to coat axons, clean up waste products and dead neurons, influence information processing, and, during prenatal development, influence the generation of new neurons.