A Study Has Been Conducted to Determine If Product a Should

question 34

Multiple Choice

A study has been conducted to determine if Product A should be dropped.Total sales of the product are $200,000 per year; total variable expenses are $140,000 per year.Total fixed expenses charged to the product are $90,000 per year.The company estimates that $40,000 of these fixed expenses will continue even if the product is dropped.These data indicate that if Product A is dropped,the company's overall operating income per year would change by how much?

• A) A decrease of $10,000.
• B) An increase of $20,000.
• C) A decrease of $20,000.
• D) An increase of $30,000.

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Definitions:

Decolorizer

A chemical used in staining procedures in microbiology to remove excess stain, helping differentiate between types of cells or parts of cells.

Ethanol

A volatile, flammable, colorless liquid commonly known as alcohol, used in beverages and as a solvent and antiseptic.

Females

This term denotes individuals of a species that are biologically characterized by the production of ova or eggs, distinct from males in sexual dimorphism.

Menstrual Period

The monthly shedding of the uterine lining in females of reproductive age, accompanied by bleeding through the vagina.