The Cabinet Shoppe Is Considering the Addition of a New

question 24

Multiple Choice

The Cabinet Shoppe is considering the addition of a new line of kitchen cabinets to its current product lines. Expected cost and revenue data for the new cabinets are as follows: If the new cabinets are added, it is expected that the contribution margin of other product lines at the cabinet shop will drop by $20,000 per year.


-If the new cabinet product line is added next year,the increase in net operating income resulting from this decision would be:

• A)$80,000
• B)$225,000
• C)$125,000
• D)$105,000

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Definitions:

Delaware Indians

A Native American tribe, also known as the Lenape, originally from the Delaware River area, who played significant roles in early American history.

Philadelphia

A city in Pennsylvania, significant for its historical role in the founding of the United States.

Dominion of New England

A short-lived administrative union of English colonies in the New England region of North America from 1686 to 1689, imposed by the British government to tighten control.

James II

King of England and Ireland, and James VII of Scotland, who ruled from 1685 until he was deposed in the Glorious Revolution of 1688.