Contribution Margin Income Statement Data for the Most Recent Year

question 168

Multiple Choice

Contribution margin income statement data for the most recent year follow:

Assuming the Dog food is discontinued,total fixed costs remain unchanged,and the space formerly used to produce the line is rented for $25,000 per year,how will operating income be affected?

• A)Increase $58,000
• B)Increase $184,000
• C)Decrease $20,000
• D)Increase $20,000

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Definitions:

Balance of Trade Deficit

An economic measure where a country's imports exceed its exports during a specific time period.

Imports and Exports

The practice of bringing goods and services into a country (imports) and sending goods and services out of a country (exports) to engage in international trade.

United States

A country located in North America comprised of 50 states, a federal district, five major self-governing territories, and various possessions, known for its diverse geography, culture, and economy.

Countertrade

A method of trade in which goods or services are exchanged for other goods or services rather than for money.