Molly, Inc

question 118

Multiple Choice

Molly, Inc. is considering eliminating one of its product lines. The fixed costs currently allocated to the product line will be allocated to other product lines upon discontinuance. What financial effects occur if the product line is discontinued?

• A)net income will decrease by the amount of the contribution margin of the product line being discontinued
• B)the company's total fixed costs will increase
• C)total fixed costs will decrease by the amount of the product line's fixed costs
• D)net income will decrease by the amount of the product line's fixed costs

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Definitions:

Narcolepsy

A chronic sleep disorder characterized by overwhelming daytime drowsiness and sudden attacks of sleep, often linked to a deficiency in the brain neurotransmitter orexin.

Somnambulism

A condition also known as sleepwalking, where an individual engages in activities that are usually performed during a state of full consciousness while being asleep.

Sleep Apnea

A condition marked by interruptions in breathing or instances of light breathing while asleep.

Microsleeps

Very short, unintended episodes of loss of attention or sleep that may last from a fraction of a second to several seconds, often happening when a person is fatigued but trying to stay awake.