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

question 90

Multiple Choice

Use the information below to answer the following question(s) :
Aqua Life Jackets, Inc. has two product lines: adult jackets and children's jackets. Contribution margin income statement data for the most recent year follow:

-Assuming the Aqua Life Jackets, Inc. children's jackets line is dropped, total fixed costs remain unchanged, and the space formerly used to produce the children's jackets line is used to double the production of adult jackets, how will operating income be affected?

• A) Increase $110,000
• B) Increase $60,000
• C) Increase $118,000
• D) Decrease $60,000

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Definitions:

Mutually Exclusive

A condition in which two or more events cannot occur at the same time.

Jointly Exhaustive

This term refers to a set of possibilities or conditions that completely covers all potential outcomes or scenarios, leaving no option unaccounted for.

Abstract

Existing in thought or as an idea but not having a physical or concrete existence.

Concepts

Cognitive units of meaning that are abstract, generalized ideas or categories representing objects, qualities, or relations.