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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