Macaulay Roller Skates Has Three Product Lines-D,E,and F

question 179

Multiple Choice

Macaulay Roller Skates has three product lines-D,E,and F.The following information is available:

The company is deciding whether to drop product line F because it has an operating loss.Assuming fixed costs are unavoidable,if Macaulay drops product line F and does not replace it,what effect will this have on operating income?

• A)Operating income will increase $6,000.
• B)Operating income will increase $19,000.
• C)Operating income will increase $25,000.
• D)Operating income will decrease $19,000.

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Definitions:

Delaying Gratification

The ability to resist the temptation for an immediate reward and wait for a later reward.

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.