Mission Company Has Three Product Lines: D, E, and F

question 52

Multiple Choice

Mission Company has three product lines: D, E, and F. The following information is available: Mission Company is thinking of discontinuing product line F because it is reporting an operating loss. All fixed costs are unavoidable. Mission Company discontinues product line F and rents the space formerly used to produce product F for $18,000 per year, what affect will this have on operating income?

• A)Increase $27,000
• B)Increase $10,000
• C)Decrease $10,000
• D)Increase $33,000

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Definitions:

Cochlea

A spiral-shaped, fluid-filled inner ear structure responsible for converting sound waves into nerve signals that the brain interprets as sound.

Cortex

The outermost layer of the brain, responsible for complex functions including thought, memory, sensory processing, and voluntary movement.

Whale Songs

Complex sequences of vocalizations produced by whales, particularly males, that are thought to play a role in communication and mating behaviors.

Functions

The natural purpose or activities associated with a person, organ, or system in biology, or a specific role or activity in more general contexts.