A Company Has Two Different Products That Are Sold in Different

question 109

Multiple Choice

A company has two different products that are sold in different markets.Financial data are as follows:

Assume that fixed costs of $1,000 could be eliminated if Product B was dropped.Assume furthermore that dropping one product would not impact sales of the other.If Product B is dropped,what would be the impact on total operating income of the company?

• A)increases by $1,000
• B)increases by $1,300
• C)increases by $300
• D)increases by $2,200

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Definitions:

Risk-Seeking

A tendency to pursue opportunities with potentially high rewards despite the associated high risks.

Tacit Knowledge

Knowledge that is difficult to transfer to another person by means of writing it down or verbalizing it, often gained through personal experience.

Codified Knowledge

Knowledge that is structured and documented in a way that it can be easily communicated to others.

Emotional Cohesion

The bond or connection between members of a group or team based on shared emotions, empathy, and emotional support.