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

question 65

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. Assuming Mission Company discontinues line F and is able to double the production and sales of product line E without increasing fixed costs. What affect will this have on operating income?

• A)Decrease $15,000
• B)Increase $15,000
• C)Increase $46,000
• D)Increase $40,000

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Definitions:

Protraction

The act of drawing out or lengthening in time; in anatomy, refers to the forward movement of a body part.

Elevation

The raising of a body part.

Depression

A common, serious medical illness that negatively affects how you feel, the way you think, and how you act, marked by persistent feelings of sadness and loss of interest.

Connective Tissue

The type of biological tissue that supports, connects, or separates different types of tissues and organs in the body.