Momentum Rollerblades Has Three Product Lines-D, E, and F The Company Is Deciding Whether to Drop Product Line F

question 30

Multiple Choice

Momentum Rollerblades has three product lines-D, E, and F. The following information is available: $$\begin{array} { | l | l | r | r | } \hline & \text { D } & \text { E } & \text { F } \\\hline \text { Sales revenue } & \$ 70,000 & \$ 40,000 & \$ 31,000 \\\hline \text { Variable costs } & ( 20,000 & \underline { ( 5000 ) } & \underline { ( 11,000 ) } \\\hline \text { Contribution margin } & \$ 50,000 & \$ 35,000 & \$ 20,000 \\\hline \text { Fixed costs } & \underline { ( 10,000 } & \underline { ( 15,000 } & \underline { ( 24,000 ) } \\\hline \text { Operating income (loss) } & \$ 40,000 & \$ 20,000 & \$ ( 4000 ) \\\hline\end{array}$$ The company is deciding whether to drop product line F because it has an operating loss. Assume that $22,000 of total fixed costs could be eliminated by dropping F. What effect would this decision have on operating income?

• A) Operating income will increase by $24,000.
• B) Operating income will increase by $2000.
• C) Operating income will decrease by $24,000.
• D) Operating income will decrease by $2000.

Discuss the impact of agricultural policies on farm income and efficiency.

Identify the factors contributing to the instability of agricultural prices and incomes.

Understand the political process and its influence on agricultural policy-making.

Examine the global implications of national agricultural policies on trade and food security.

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Definitions:

Life

A characteristic that distinguishes physical entities with biological processes, such as signaling and self-sustaining processes, from those that do not.

Bilateral Symmetry

Body plan in which organs or parts present on both sides of the body are mirror images in appearance. For example, the hands are bilaterally symmetrical, whereas the heart is not.

Advanced Nervous Systems

Highly developed neurological structures that allow for complex behaviors, information processing, and adaptation in organisms.

Hemispheres

Refers to the two halves of the brain, each of which has specialized functions.