Faros Hats, Etc

question 98

Multiple Choice

Faros Hats, Etc. has two product lines-baseball helmets and football helmets. Income statement data for the most recent year follow: Assuming the Football Helmets line is dropped, total fixed costs remain unchanged, and the space formerly used to produce the line is rented for $100,000 per year, how will operating income be affected?

• A)Operating income will increase $30,000.
• B)Operating income will increase $10,000.
• C)Operating income will decrease $10,000.
• D)Operating income will decrease $80,000.

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Definitions:

Conflict Theory

A sociological perspective that views social life as a competition, highlighting the struggles between groups for limited resources.

Capitalist Aims

Capitalist aims involve maximizing profit and capital accumulation within a market economy, typically emphasizing private ownership, competition, and limited government intervention in economic activities.

Self-Fulfilling Prophesy

A forecast that, through a cycle of self-reinforcement, becomes a reality because of the interaction between conviction and action.

Classic And Contemporary Research

Involves the study and application of key findings and methodologies from both historical and modern academic inquiries across disciplines.