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

question 202

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 and increase the sale of Part L2 by 3,000 units at a selling price of $30 per unit and a contribution margin of $4 per unit, then dropping the Part C6 should result in which of the following?

• A) Increase in total operating income of $13,000
• B) Increase in total operating income of $53,000
• C) Decrease in total operating income of $13,000
• D) Decrease in total operating income of $53,000

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Definitions:

Dissociative Disorder

A mental health condition characterized by a disconnection and lack of continuity between thoughts, memories, surroundings, actions, and identity.

Fugue State

A rare psychological state involving loss of personal identity and travel or wandering, often with the establishment of a new identity.

Emotionally Volatile

Refers to individuals who experience intense emotions that can change rapidly and unpredictably, often affecting their behaviors and relationships.

Borderline Personality

A mental health disorder characterized by unstable moods, behavior, and relationships, often resulting in significant emotional suffering.