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

question 72

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 expenses are unavoidable. Assuming Mission Company discontinues product line F and does not replace it, what affect will this have on operating income?

• A)Increase $10,000
• B)Increase $17,000
• C)Increase $7000
• D)Decrease $7000

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Definitions:

Peyote

A small, spineless cactus containing psychoactive alkaloids, particularly mescaline, used primarily in Native American spiritual practices for its hallucinogenic properties.

Inhalants

Solvents, such as gasoline, glue, or paint thinner, that one inhales to produce a high and that can cause permanent central nervous system damage as well as liver and kidney disease.

Inhalant Use

The act of inhaling substances, often household or industrial chemicals, to achieve a psychoactive or mind-altering effect.

Phencyclidine (PCP)

A hallucinogenic drug that can induce dissociation, euphoria, and sometimes violent behavior, commonly known as Angel Dust.