A Company Has Two Different Products That Are Sold in Different

question 132

Multiple Choice

A company has two different products that are sold in different markets.Financial data are as follows: $$\begin{array} { | l | r | r | r | } \hline & \text { Product A } & \text { Product B } & \text { Total } \\\hline \text { Revenue } & \$ 18,000 & \$ 9300 & \$ 27,300 \\\hline \text { Variable cost } & ( 8000 ) & ( 9900 ) & ( 17,900 ) \\\hline \text { Fixed cost (allocated) } & \$ 1000 ) & ( 2100 ) & \$ 3100 ) \\\hline \text { Operating income (loss) } & \$ 9000 & \$ ( 2700 ) & \$ 6300 \\\hline\end{array}$$ Assume that fixed costs are all unavoidable and that dropping one product would not impact sales of the other.If Product B is dropped,what would be the impact on total operating income of the company?

• A) increases by $2100
• B) increases by $600
• C) decreases by $2100
• D) decreases by $600

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Definitions:

Rationalize

The process of attempting to explain or justify behavior or attitudes with logical reasons, even if these are not appropriate.

Institutional Racism

Discriminatory practices, policies, and patterns that have become embedded in the operations of societal institutions, leading to disadvantages for people of certain races or ethnicities.

Disparities

Inequalities or differences often observed in healthcare, education, employment, and other sectors, typically among varied demographic groups.

Underrepresentation

describes the insufficient or unequal representation of a group in a particular context or field, often highlighting disparities.