Diamond Company Has Three Product Lines, A, B, and C

question 24

Multiple Choice

Diamond Company has three product lines, A, B, and C. The following financial information is available:If Product Line C is discontinued and the manufacturing space formerly devoted to this line is rented for $6,000 per year, pre-tax operating income for the company will likely:

• A) Be unchanged—the two effects cancel each other out.
• B) Increase by $3,300.
• C) Increase by $4,500.
• D) Increase by $7,200.
• E) Increase by some other amount.

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Definitions:

Strategic Goals

Long-term objectives that guide an organization's efforts towards achieving its vision and mission.

Top Management

The highest tier of executives and administrators in an organization, responsible for setting strategies, policies, and making crucial decisions.

Quality Management

The act of overseeing all activities and tasks needed to maintain a desired level of excellence in products or services.

Management by Objectives (MBO)

A management strategy where managers and employees work together to define, plan, and achieve specific objectives that align with the organization's goals.