Black Productions Has Three Models: D, E, and F

question 109

Multiple Choice

Black Productions has three models: D, E, and F. The following information is available: Black Productions is thinking of discontinuing model F because it is reporting an operating loss. All fixed expenses are unavoidable. Assuming Black Productions discontinues model F and does not replace it, what effect will this have on operating income?

• A)Decrease $10,000
• B)Increase $10,000
• C)Increase $6,000
• D)Decrease $6,000

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Definitions:

Exploitation

The act of unfairly using someone or something for one’s own advantage or profit, often in an unethical or unjust manner.

Small Investors

Individuals who invest modest amounts of money in financial markets or ventures, lacking the significant resources of institutional investors.

Blue-sky Laws

State regulations designed to protect investors from securities fraud by requiring sellers of new issues to register their offerings and provide financial details.

State Securities Laws

Regulations established by individual states governing the sale and distribution of securities to protect investors against fraud.