The Management of Fannin Corporation Is Considering Dropping Product H58S

question 93

Multiple Choice

The management of Fannin Corporation is considering dropping product H58S.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 $90,000 of the fixed manufacturing expenses and $42,000 of the fixed selling and administrative expenses are avoidable if product H58S is discontinued.What would be the effect on the company's overall net operating income if product H58S were dropped?

• A)Overall net operating income would decrease by $137,000.
• B)Overall net operating income would increase by $137,000.
• C)Overall net operating income would decrease by $151,000.
• D)Overall net operating income would increase by $151,000.

Distinguish between various factors that shift the demand and supply curves in the markets for loanable funds and foreign-currency exchange.

Understand the equilibrium condition in the open-economy macroeconomic model and its implications for domestic investment, net capital outflow, and net exports.

Identify the roles of government budget deficits and surpluses in the open-economy macroeconomic model.

Analyze the implications of changes in real interest rates on net capital outflow and the demand for loanable funds.

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Definitions:

Behavioral Segmentation

A segmentation method that divides customers into groups based on how they use the product or service. Some common behavioral measures include occasion and loyalty.

Geographic Segmentation

A marketing strategy that divides the market into different geographical units such as countries, regions, cities, or neighborhoods.

Benefits Segmentation

A market segmentation technique that categorizes consumers based on the specific benefits they seek from products or services, rather than demographic factors.

Psychographics

Used in segmentation; delves into how consumers describe themselves; allows people to describe themselves using those characteristics that help them choose how they occupy their time (behavior) and what underlying psychological reasons determine those choices.