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

question 254

Multiple Choice

Use the information below to answer the following question(s) :
Westfall Watches has two product lines: Luxury watches and Sporty watches. Income statement data for the most recent year follow:

-Assuming the Sporty line is discontinued, total fixed costs remain unchanged, and the space formerly used to produce the Sporty line is used to increase the production of Luxury watches by 250%, how will operating income be affected?

• A) Increase $299,500
• B) Increase $177,500
• C) Increase $236,500
• D) Decrease $177,500

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Definitions:

Future Orientation

Future orientation is the degree to which individuals think about and plan for the future, influencing decision-making, goal setting, and behaviors in pursuit of long-term achievements.

GLOBE Project

An extensive and ongoing cross-cultural research program analyzing the impact of culture on leadership effectiveness and organizational practices across the world.

Long-Term Planning

The process of setting major goals and objectives and outlining the strategies to achieve them over an extended period, usually several years into the future.

Acquisition Strategy

The plan or approach a company uses to acquire other companies or assets to achieve growth, diversify, or gain competitive advantages.