Pottery Unlimited Has Two Product Lines: Cups and Pitchers

question 169

Multiple Choice

Pottery Unlimited has two product lines: cups and pitchers.Income statement data for the most recent year follow:
- Assuming the Pitcher line is dropped,total fixed costs remain unchanged,and the space formerly used to produce the line is rented for $45,000 per year,how will operating income be affected?

• A)Decrease $15,000
• B)Increase $167,000
• C)Increase $44,000
• D)Increase $15,000

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Definitions:

Swings

Playground equipment consisting of a seat suspended by ropes or chains, used for moving back and forth.

Negative Reinforcement

A behavioral psychology concept where the removal of an unfavorable outcome or stimulus strengthens a behavior.

Nagging

Persistent and repetitive asking or demanding, often perceived as annoying or bothersome.

Positive Punishment

A concept in behaviorism where an undesirable behavior is followed by an unfavorable outcome or stimulus, with the intention of decreasing that behavior.