Macaulay Company Has Three Product Lines-D, E, and F Macaulay Company Is Thinking of Dropping Product Line F Because

question 32

Multiple Choice

Macaulay Company has three product lines-D, E, and F. The following information is available: $\begin{array}{|l|c|c|c|} \hline& \text { D } & \text { E } & \text { F } \\\hline \text { Sales } & \$ 70,000 & \$ 40,000 & \$ 30,000 \\\hline \text { Variable costs } & (40,000) & (20,000) & (10,000) \\\hline \text { Contribution margin } & 30,000 & 20,000 & 20,000 \\\hline \text { Fixed expenses } & (15,000) & (15,000) & (25,000) \\\hline \text { Operating income (loss) } & \$ 15,000 & \$ 5,000 & (\$ 5,000) \\\hline\end{array}$ Macaulay Company is thinking of dropping product line F because it is reporting an operating loss.
- Assuming fixed costs are unavoidable, if Macaulay Company drops product line F, and rents the space formerly used to produce product F for $17,000 per year, total income will be:

• A) $10,000.
• B) $12,000.
• C) $20,000.
• D) $25,000.

Grasp the impact of sample size and level numbers on the degrees of freedom in factorial designs.

Appreciate the importance of hypothesis testing in analyzing factorial ANOVA results.

Understand how to interpret interaction effects between factors in the context of factorial ANOVA.

Understand the concept of interaction effects and how they differ from main effects in the context of factorial research design.

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Definitions:

Service Fee

A charge added to a customer's bill for the provision of services by a company or professional.

ROEs

Return on Equity, a measure of a corporation's profitability that reveals how much profit a company generates with the money shareholders have invested.

Total Assets Turnover

A financial ratio that measures how effectively a company uses its total assets to generate sales revenue.

Net Working Capital

The difference between a company's current assets and current liabilities, indicating its short-term financial health.