HiTech Manufactures Two Products: Regular and Super

question 63

Multiple Choice

HiTech manufactures two products: Regular and Super. The results of operations for 20x1 follow. Fixed manufacturing costs included in cost of goods sold amount to $3 per unit for Regular and $20 per unit for Super. Variable selling expenses are $4 per unit for Regular and $20 per unit for Super; remaining selling amounts are fixed.
HiTech wants to drop the Regular product line. If the line is dropped, company-wide fixed manufacturing costs would fall by 10% because there is no alternative use of the facilities. What would be the impact on operating income if Regular is discontinued?

• A) $0.
• B) $10,400 increase.
• C) $20,000 increase.
• D) $39,600 decrease.
• E) None of the other answers are correct.

Recognize the critical role of bacteria in biogeochemical cycles.

Understand the distribution of Earth's water resources and the significance of soil and groundwater.

Differentiate between autotrophic and heterotrophic organisms and their role in ecosystems.

Comprehend the flow of energy through ecosystems and the importance of primary production.

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Definitions:

Direct Ownership System

A system where assets are directly owned by individuals or entities, allowing for complete control and management of those assets.

Control

The process of monitoring activities to ensure they are being accomplished as planned and correcting any significant deviations.

Quality Levels

The standards or benchmarks set to measure the overall excellence or effectiveness of a product, service, or process.

Product-distribution Franchising

A franchising model in which the franchisee is granted the right to sell the franchisor's products, often including distribution rights in a specific territory.