A Company Has Two Different Products That Are Sold in Different

question 119

Multiple Choice

A company has two different products that are sold in different markets. Financial data are as follows: Assume that fixed costs of $1,000 could be eliminated if product B was dropped. Assume furthermore that dropping one product would not impact sales of the other. If Product B is dropped, what would be the impact on total operating income of the company?

• A)increase $1,000
• B)increase $1,300
• C)increase $300
• D)increase $2,000

Evaluate assets and liabilities to prepare for liquidation or reorganization decisions.

Distinguish between asset, liability, equity, revenue, and expense accounts.

Recognize the role and structure of the chart of accounts.

Identify the significance and types of source documents in accounting.

---

Definitions:

Trade-offs

The compromises or sacrifices made when choosing one option over another, often involving conflicting objectives.

Strong Culture

An organizational environment characterized by shared beliefs and values that influence behavior and contribute to unity and cohesiveness.

Pluralistic View

An outlook or approach that acknowledges and embraces diversity, understanding that multiple perspectives exist and are valuable in society or an organization.

Strong Culture

An organizational environment characterized by widely shared beliefs, values, and practices that unify members and promote behavioral consistency.