The Internal Financial Statements of Vera Incorporated Show That Their

question 10

Multiple Choice

The internal financial statements of Vera Incorporated show that their beaded purses incurred an operating loss in the most recent year. There were 25,000 purses sold in that year. Selected financial information about the purse line follows. If the line of purses were to be discontinued, the company would avoid $18,000 in fixed costs per year.
If Vera Incorporated were to discontinue the line of purses, the change in annual operating income would be a(n)

• A)increase in total operating income of $81,000.
• B)decrease in total operating income of $2000.
• C)increase in total operating income of $2000.
• D)decrease in total operating income of $81,000.

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Definitions:

Tentative Explanations

Initial theories or hypotheses offered as possible explanations for observed phenomena, subject to testing and refinement.

Theories

Systematic frameworks for understanding the principles and structures of various phenomena, grounded in observations and evidence.

Social Life

The part of an individual's time that they spend participating in community or societal activities, or interacting with family, friends, and acquaintances outside of work or personal solitude.

Labor Process

The methods, practices, and relations involved in the production of goods and services, including the organization of work and labor relations.