Use the Information Below to Answer the Following Question(s)

question 182

Multiple Choice

Use the information below to answer the following question(s) :
Darren Company has three product lines: D, E, and F. The following information is available:

-Darren Company is thinking of dropping product line F because it is reporting an operating loss. All fixed costs are unavoidable. Assuming Darren Company drops line F and is able to double the production and sales of product line E without increasing fixed costs. What affect will this have on operating income?

• A) Decrease $20,000
• B) Increase $20,000
• C) Decrease $3,000
• D) Increase $3,000

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Definitions:

Punishment

Punishment involves the application of an adverse event or condition in response to unwanted behavior, aiming to reduce or eliminate that behavior.

Misbehave

To act out or behave badly, often violating social norms or expectations.

Justification

Justification involves providing reasons, explanations, or rationalizations for one's actions or beliefs, often to align with moral, legal, or social standards.

Attitudes

Mental and emotional entities that denote an individual's degree of like or dislike for an item.