A Study Has Been Conducted to Determine If Product a Should

question 402

Multiple Choice

A study has been conducted to determine if Product A should be dropped. Sales of the product total $500,000; variable expenses total $340,000. Fixed expenses charged to the product total $210,000. The company estimates that $60,000 of these fixed expenses are not avoidable even if the product is dropped. If Product A is dropped, the annual financial advantage (disadvantage) for the company of eliminating this product should be:

• A) ($10,000)
• B) $10,000
• C) ($50,000)
• D) $50,000

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Definitions:

Tuning Fork

A metal instrument that, when struck, produces a sound of a specific pitch, used in medical exams to assess hearing and vibration sensation.

Ophthalmoscope

A medical device used by healthcare professionals to examine the interior of the eye.

Stethoscope

A medical instrument used by healthcare professionals to listen to internal body sounds, such as the heartbeat or breathing.

Spirometer

A medical instrument used to measure the volume of air inhaled and exhaled by the lungs, commonly used in diagnosing respiratory disorders.