Carlton Products Has Three Product Lines: A,B,and C Management Is Considering Dropping Product Line B

question 28

Multiple Choice

Carlton Products has three product lines: A,B,and C.
$\begin{array}{lr}&\underline{\text { A }} &\underline{\text { B }} &\underline{ \text { C }} &\underline{ \text { Total }}\\ \text { Sales } &\$50000&\$550200&\$700000&\$1750000\\ \text { Variable costs } &\underline{280000}&\underline{420000}&\underline{300000}&\underline{1000000}\\ \text {Contribution margin } &220000&130000&400000&750000\\ \text { Fixed costs} &\underline{100000}&\underline{140000}&\underline{150000}&\underline{390000}\\ \text { Net income} &\underline{\$120000}&\underline{\$10000}&\underline{\$(250000) }&\underline{\$360000}\\ \text { } &\\\end{array}$




Management is considering dropping product line B.If it is discontinued,all of its fixed costs can be avoided.The discontinuation of product line B would:

• A) decrease net income $10 000.
• B) increase net income $140 000.
• C) decrease net income $130 000.
• D) increase net income $10 000.

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Definitions:

Depression

An ailment relating to mental health, defined by an enduring state of unhappiness or apathy towards activities, that substantially hampers normal life.

Psychotic Disorder

A psychological disorder in which a person loses contact with reality, experiencing irrational ideas and distorted perceptions.

Diagnostic Labels

Terms used to categorize and describe symptoms that cluster together, aiding healthcare professionals in identifying and treating mental health conditions or illnesses.

Biasing Power

The influence or tendency to skew judgment or decision-making in a particular direction, often unconsciously.