Use the Information Below to Answer the Following Question(s)

question 4

Multiple Choice

Use the information below to answer the following question(s) :
The income statement for Champion Parts is divided by its two product lines, Part L2 and Part C6, as follows:

-If Champion Parts can eliminate fixed costs of $40,000 by dropping the Part C6 line, then dropping it should result in which of the following?

• A) Increase in total operating income of $25,000
• B) Increase in total operating income of $65,000
• C) Decrease in total operating income of $65,000
• D) Decrease in total operating income of $25,000

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Definitions:

Rice Plantations

Large agricultural estates typically found in the southern United States where rice is grown as the main crop, historically reliant on the labor of enslaved Africans.

Birthrate of Slaves

The rate at which enslaved individuals gave birth, an indicator of population changes among enslaved communities.

Middle Passage

The sea voyage that transported enslaved Africans across the Atlantic Ocean to the Americas, a central part of the transatlantic slave trade known for its brutal conditions.

Great Awakening

A series of religious revivals in the American colonies in the 18th and early 19th centuries that emphasized emotional spirituality over traditional doctrine.