Bingham Company Manufactures and Sells Product J Bingham Company Anticipates No Change in the Operating Result for Year

question 71

Multiple Choice

Bingham Company manufactures and sells Product J. Results for last year for the manufacture and sale of Product J are as follows:

$\begin{array}{|l|r|}\hline \text { Sales }(10,000 \text { units at } \$ 160 \text { each) } & \$ 1,600,000 \\\hline \text { Less: Costs; } & \$ 960,000 \\\hline \text { Variable Production Costs } & \$ 240,000 \\\hline \text { Sales Commisions }-15 \% \text { of Sales } & \$ 195,000 \\\hline \text { Salaries of Line Supervisors } & \$ 180,000 \\\hline \text { Traceable Fixed Factory Overhead (Allocated to } & \$ 170,000 \\\text { product on the Basis of Square Meters Occupied) } & \\\hline \text { Total Cost } & \$ 1,745,000 \\\hline \text { Operating Income (Loss) } & \$ 145,000 \\\hline\end{array}$

Bingham Company anticipates no change in the operating result for Product $\mathrm{J}$ in the foreseeable future if the product is produced. Bingham is re-examining all of its products and is trying to decide whether or not to discontinue the manufacture and sale of Product J. The company's total fixed factory overhead cost would not be affected by this decision.
-Assume that discontinuing Product J would result in a $30,000 increase in the contribution margin of other product lines.If Bingham chooses to discontinue Product J,what will be the change in operating income next year due to this action?

• A) $5,000 increase.
• B) $120,000 increase.
• C) $145,000 increase.
• D) $145,000 decrease.

Analyze individual and ecological factors in the assessment process.

Grasp the concept of motivational congruence and additive empathy in enhancing client self-awareness.

Evaluate the progress of clients towards goal attainment and the termination of the helping process.

Understand the importance and appropriateness of different forms of introductions in various cultural contexts.

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Definitions:

Pupil

The black circular opening in the iris of the eye, which regulates the amount of light that enters the eye.

Iris

The colored part of the eye surrounding the pupil, controlling the amount of light that enters the eye by adjusting the size of the pupil.

Absolute Threshold

The minimum intensity of a stimulus that one can detect 50 percent of the time, a concept fundamental in sensory and perception studies.

Difference Threshold

The minimum difference in stimulation that a person can detect 50 percent of the time.