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

question 10

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.Assume Jim Bean Company is able to increase the sales revenue of product F to $32,000 with no change in volume of units sold and no change in variable costs or fixed costs.What affect will this have on operating income?

• A)Increase $37,000
• B)Increase $12,000
• C)Decrease $12,000
• D)Decrease $20,000

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Definitions:

Affective Disorder

A category of mental health disorders that primarily affect mood and emotions, such as depression and bipolar disorder.

Bipolar

A mental disorder characterized by periods of elevated mood and periods of depression.

Depression

is a common mental health disorder characterized by persistent sadness, loss of interest, and a lack of energy or motivation.

PTSD

Post-Traumatic Stress Disorder, a mental health condition triggered by experiencing or witnessing a terrifying event, characterized by flashbacks, nightmares, and severe anxiety.