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

question 129

Multiple Choice

Motion Rollerblades has three product lines-D,E,and F.The following information is available: $\begin{array} { | l | c | c | c | } \hline & \text { D } & \text { E } & \text { F } \\\hline \text { Sales revenue } & \$ 90,000 & \$ 50,000 & \$ 31,000 \\\hline \text { Variable costs } & ( 40,000 ) & ( 15,000 ) & ( 12,000 ) \\\hline \text { Contribution margin } & \$ 50,000 & \$ 35,000 & \$ 19,000 \\\hline \text { Fixed costs } & ( 15,000 & \underline { ( 10,000 ) } & \underline { ( 23,000 ) } \\\hline \text { Operating income (loss) } & \$ 35,000 & \$ 25,000 & \$ ( 4000 ) \\\hline\end{array}$ The company is deciding whether to drop product line F because it has an operating loss.Assuming fixed costs are unavoidable,if Motion drops product line F and does not replace it,what effect will this have on operating income?

Recognize the management strategies and union responses in labor disputes.

Comprehend the effects of labor relations strategies on the operations and workforce of a company.

Understand the impact of workforce diversity, including the benefits, challenges, and related controversies such as affirmative action.

Recognize non-financial forms of compensation and their importance to employees.

Definitions:

Creativity

The ability to generate or recognize ideas, alternatives, or possibilities that may be useful in solving problems, communicating with others, and entertaining ourselves and others.

Task Expertise

Specific knowledge or skills related to performing certain tasks efficiently and effectively.

Optimizing Decisions

Optimizing decisions give the absolute best solution to a problem.

Rules Of Thumb

Simple, practical guidelines or principles, often based on experience rather than precise knowledge, used to make decisions or solve problems.