Jim Bean Company Has Three Product Lines: D,E,and F

question 136

Multiple Choice

Jim Bean Company has three product lines: D,E,and F.The following information is available:
Jim Bean Company is thinking of discontinuing product line F because it is reporting an operating loss.All fixed costs are unavoidable.Assuming Jim Bean Company discontinues line F and is able to double the production and sales of product line E without increasing fixed costs.What affect will this have on operating income?

• A)Decrease $13,000
• B)Increase $13,000
• C)Increase $30,000
• D)Increase $34,000

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