Shine Bright Company Has Three Product Lines-D, E, and F

question 116

Multiple Choice

Shine Bright Company has three product lines-D, E, and F. The following information is available: Shine Bright Company is thinking of dropping product line F because it is reporting an operating loss. Assuming fixed costs are unavoidable, if Shine Bright Company drops product line F and does not replace it, what effect will this have on operating income?

• A)Operating income will increase $2,000.
• B)Operating income will increase $14,000.
• C)Operating income will increase $16,000.
• D)Operating income will decrease $14,000.

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Definitions:

Physical Arousal

A physiological state of heightened activation or readiness of the body's systems, often triggered by emotion, exercise, or stimulation.

Stoner Experiment

A study on group decision-making that found individuals in groups tend to make riskier decisions compared to choices made individually, also known as the "risky shift" phenomenon.

Risky Condition

A situation or environment that presents potential hazards or uncertainties, often requiring cautious decision-making.

Conservative Decision

A choice-making process that tends to be cautious, aiming to minimize risk and prioritize safety over gains.