Rambo Company Has Three Products,A,B,and C Rambo Company Is Thinking of Dropping Product C Because It

question 56

Multiple Choice

Rambo Company has three products,A,B,and C.The following information is available: $\begin{array}{lrrr}&\text { Product A }&\text { Product B }&\text { Product C }\\\text { Sales } & \$ 60,000 & \$ 90,000 & \$ 24,000 \\\text { Variable costs } & 36,000 & 48,000 & 15,000 \\\text { Contribution margin } & 24,000 & 42,000 & 9,000 \\\text { Fixed costs: } & & &\\\text { Avoidable } & 6,000 & 15,000 & 4,000 \\\text { Unavoidable } & 7,000 & 9,000 & 5,400 \\\text { Operating income } & \$ 11,000 & \$ 18,000 & \$(400) \end{array}$ Rambo Company is thinking of dropping Product C because it is reporting a loss.Assuming Rambo drops Product C and does NOT replace it,operating income will ________.

• A) increase by $400
• B) increase by $4,000
• C) decrease by $5,000
• D) decrease by $9,400

Understand the care needs and management for patients with comorbid conditions.

Communicate effectively with patients about concerns and effects of cancer treatments.

Recognize and assess varying caregiving patterns in cancer survivorship.

Plan for cancer survivor care needs considering the lack of survivorship care plans.

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Definitions:

Cash Basis

A financial recording approach that logs income and expenditures at the time of actual receipt or payment, rather than when they are earned or owed.

Investing Activities

Transactions and events related to the acquisition and disposal of long-term assets and other investments not considered cash equivalents.

Financing Activities

Transactions that involve raising capital or repaying investors, such as issuing shares or taking out loans.

Indirect Method

A way of preparing the cash flow statement where net income is adjusted for changes in balance sheet items to obtain net cash flow from operating activities.