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

question 198

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 costs are unavoidable. Assume Percy Productions is able to increase the sales revenue of product F to $32,000 with no change in volume of units sold and no change in variable costs or fixed costs. What effect will this have on operating income?

• A)Increase $11,000
• B)Increase $24,000
• C)Decrease $11,000
• D)Decrease $24,000

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Definitions:

Tactics

Strategies or actions carefully planned to achieve a specific end.

Talk Negatively

Engaging in conversation that focuses on criticism, pessimism, or highlighting flaws without constructive purpose.

Exit Statement

A formal declaration made when leaving a position or situation, sometimes including reasons for the departure.

Perception

The process of interpreting, analyzing, and assigning meaning to sensory information.