Macaulay Company Has Three Product Lines-D, E, and F

question 32

Multiple Choice

Macaulay Company has three product lines-D, E, and F. The following information is available: Macaulay Company is thinking of dropping product line F because it is reporting an operating loss. Assume that $15,000 of total fixed costs could be eliminated by dropping F. What effect would this decision have on operating income?

• A)Operating income will increase by $25,000.
• B)Operating income will increase by $20,000.
• C)Operating income will decrease by $5,000.
• D)Operating income will decrease by $15,000.

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Definitions:

Off-site

Off-site refers to activities or processes that are conducted away from the primary location or site, often implying external premises.

Office Layouts

The arrangement of furniture, equipment, and space in an office to optimize productivity and accommodate employees.

Off-site Employees

Workers who perform their job functions outside of the traditional office setting, such as remote or telecommute positions.

Fixed Position Layout

An arrangement where the product being worked on remains stationary, and workers, materials, and equipment move around it.