The Tangier Company Is Considering Eliminating the Following Product Line

question 94

Multiple Choice

The Tangier Company is considering eliminating the following product line: $\begin{array}{lr}&\underline{\text { Product AXP}}\\\text { Sales}&\$80,000\\\text { Less variable costs: }\\\text { Raw materials } & 50,000 \\\text { Direct labor } & \underline{10,000}\\\text { Contribution margin } & \$ 20,000 \\\text { Less fixed costs: } & \\\text { Production costs allocated to products } &\underline{30,000} \\\text { Profit (Loss) } & \$(10,000) \\\end{array}$ What amount of cost is avoidable if Tangier outsources production of this product?

• A) $60,000
• B) $50,000
• C) $90,000
• D) $20,000

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Definitions:

Future Orientation

A psychological perspective that involves thinking about and planning for the future, emphasizing long-term goals and outcomes.

Planning

The process of setting goals, defining strategies to achieve those goals, and outlining tasks and schedules to implement the strategies.

Path-Goal Theory

This leadership model posits that the leader's main job is to assist followers in attaining their goals and to provide direction or support needed to ensure their goals are compatible with the organization's objectives.

Global Leader Behavior

The actions and strategies employed by leaders operating in an international context, to effectively manage, motivate, and communicate across cultural boundaries.