The Management of Heider Corporation Is Considering Dropping Product J14V

question 56

Multiple Choice

The management of Heider Corporation is considering dropping product J14V. Data from the company's accounting system appear below: In the company's accounting system all fixed expenses of the company are fully allocated to products. Further investigation has revealed that $211,000 of the fixed manufacturing expenses and $172,000 of the fixed selling and administrative expenses are avoidable if product J14V is discontinued. What would be the effect on the company's overall net operating income if product J14V were dropped?

• A)Overall net operating income would decrease by $55,000.
• B)Overall net operating income would increase by $160,000.
• C)Overall net operating income would increase by $55,000.
• D)Overall net operating income would decrease by $160,000.

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Definitions:

CT Scan

A medical imaging technique that uses computer-processed combinations of multiple X-ray measurements taken from different angles to produce cross-sectional images of specific areas of the body.

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The complex composition of the brain, including its various parts, such as the cerebrum, cerebellum, and brain stem, and their functions.

Oscilloscope

An electronic instrument that visually displays varying signal voltages, usually as a two-dimensional graph of one or more signals as a function of time.

Action Potential

A rapid and temporary electrical charge that travels along the membrane of a neuron, signaling neuronal activity.