Austin Wool Products Purchases Raw Wool and Processes It into Yarn

question 102

Multiple Choice

Austin Wool Products purchases raw wool and processes it into yarn. The spindles of yarn can then be sold directly to stores or they can be used by Austin Wool Products to make afghans. Each afghan requires one spindle of yarn. Current cost and revenue data for the spindles of yarn and for the afghans are as follows: Each month 4,000 spindles of yarn are produced that can either be sold outright or processed into afghans.
-If Austin chooses to produce 4,000 afghans each month,the change in the monthly net operating income as compared to selling 4,000 spindles of yarn is:

• A)$24,000 decrease
• B)$24,000 increase
• C)$16,000 decrease
• D)$16,000 increase

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Definitions:

Amygdala

A part of the brain's limbic system involved in processing emotions, especially fear and pleasure, and forming emotional memories.

Conditioned Fear

A learned response that links a previously neutral stimulus with fear, resulting from the repeated pairing of that stimulus with an aversive event.

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A flammable hydrocarbon liquid commonly used as fuel in heating, lamps, and jet engines, derived from petroleum.

Campfire

An outdoor fire created in a pit or ring of stones, typically used for warmth, cooking, or entertainment purposes.