Carlton Products Has Three Product Lines: A, B, and C

question 10

Multiple Choice

Carlton Products has three product lines: A, B, and C.
Management is considering dropping product line B. If it is discontinued, all of its fixed costs can be avoided. The discontinuation of product line B would:

• A) decrease net income $10,000.
• B) increase net income $140,000.
• C) decrease net income $130,000.
• D) increase net income $10,000.

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Definitions:

Global Sourcing

The practice of sourcing goods and services from the global market to take advantage of global efficiencies, such as lower cost or higher quality.

Dependable Service

A reliable and trustworthy service that consistently meets its promised criteria and customer expectations.

Near Shoring

The practice of transferring a company's business or production processes to neighboring or nearby countries to reduce costs and improve logistics.

Disintermediation

Eliminating intermediaries in a supply chain, allowing direct transactions between buyers and producers.