Camera Corner Is Considering Eliminating Model AE2 from Its Camera

question 214

Multiple Choice

Camera Corner is considering eliminating Model AE2 from its camera line because of losses over the past quarter.The past three months of information for Model AE2 are summarized below: $\begin{array}{lr}\text { Sales (1,000 units) } & \$ 300,000 \\\text { Manufacturing costs: } & \\\quad \text { Direct materials } & 150,000 \\\quad \text { Direct labor ( } \$ 15 \text { per hour) } & 60,000 \\\quad \text { Overhead } & 100,000 \\\text { Operating loss } & (\$ 10,000) \end{array}$ Overhead costs are 70% variable and the remaining 30% is depreciation of special equipment for model AE2 that has no resale value.
If Model AE2 is dropped from the product line,operating income will ________.

• A) increase by $10,000
• B) decrease by $20,000
• C) increase by $30,000
• D) decrease by $10,000

---

Definitions:

REM Sleep

A phase of sleep characterized by rapid eye movements, low muscle tone, and vivid dreams, playing a critical role in emotional regulation and memory.

Night's Sleep

The period of restful sleep experienced during the night, critical for physical and mental health.

Paradoxical Sleep

Also known as REM (Rapid Eye Movement) sleep, is a phase of sleep characterized by rapid movement of the eyes, low muscle tone throughout the body, and the propensity of the sleeper to dream vividly.

REM Sleep

Rapid Eye Movement sleep, a unique phase of sleep characterized by rapid movements of the eyes, vivid dreams, and increased brain activity.