Percy Productions Has Three Models: D, E, and F

question 35

Multiple Choice

Percy Productions has three models: D, E, and F. The following information is available: Percy Productions is thinking of discontinuing model F because it is reporting an operating loss. All fixed expenses are unavoidable. Assuming Percy Productions discontinues model F and does not replace it, what effect will this have on operating income?

• A)Decrease $13,000
• B)Increase $13,000
• C)Increase $7000
• D)Decrease $7000

---

Definitions:

Cognitive

Relating to the process of thinking, understanding, learning, and remembering, which encompasses various mental activities like perception, reasoning, and judgment.

Dual-Process Theory

A cognitive psychology theory that proposes there are two distinct systems for processing information: a fast, automatic, intuitive system, and a slower, more analytical, deliberate system.

Social Identity Theory

A psychological theory that explains how individuals categorize themselves and others into groups, influencing their sense of self and their interactions with others.

Political Party

An organized group of people with at least roughly similar political aims and opinions, seeking to influence public policy by getting its candidates elected to public office.