A Company Has Two Different Products That Sell to Separate

question 31

Multiple Choice

A company has two different products that sell to separate markets. Financial data are as follows: Assume that fixed costs of $500 could be eliminated if product B was dropped; assume furthermore that dropping one product would not impact sales of the other. If Product B is dropped, what would the impact be on total operating income?

• A)Increase $1,100
• B)Increase $600
• C)Increase $500
• D)Increase $100

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Definitions:

Genetic Abnormalities

Irregularities in the DNA sequence or chromosome structure that may lead to diseases, developmental disorders, or characteristic physical features.

Y Chromosome

The Y chromosome is one of the two sex chromosomes in humans (the other being X) and is associated with male biological characteristics.

X Chromosome

One of the two sex chromosomes, with females typically having two X chromosomes and males having one X and one Y chromosome.

Bipolar Disorder

A mental disorder marked by extreme mood swings from mania to depression.