A Study Has Been Conducted to Determine If Product a Should

question 34

Multiple Choice

A study has been conducted to determine if Product A should be dropped.Total sales of the product are $200,000 per year; total variable expenses are $140,000 per year.Total fixed expenses charged to the product are $90,000 per year.The company estimates that $40,000 of these fixed expenses will continue even if the product is dropped.These data indicate that if Product A is dropped,the company's overall operating income per year would change by how much?

• A) A decrease of $10,000.
• B) An increase of $20,000.
• C) A decrease of $20,000.
• D) An increase of $30,000.

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Definitions:

Anger

An emotional state that may range from minor irritation to strong rage, often triggered by perceived wrongs or injustices.

Fundamental Attribution Error

A cognitive bias that involves overattributing others' behaviors to their personal characteristics while underestimating situational factors.

Extenuating Circumstances

Conditions or factors that lessen the severity or culpability in a situation or a criminal act.

Videotaped Confessions

Recorded admissions of guilt by suspects, often used as evidence in legal proceedings, which can raise issues related to coercion and voluntariness.