[The Following Information Applies to the Questions Displayed Below

question 54

Multiple Choice

[The following information applies to the questions displayed below.]
BT&T Corporation manufactures telephones.Recently,the company produced a batch of 600 defective telephones at a cost of $9,000.BT&T can sell these telephones as scrap for $9 each.It can also rework the entire batch at a cost of $6,500,after which the telephones could be sold for $20 per unit.
-If BT&T reworks the defective telephones,by how much will its operating income change?

• A)Increase by $500
• B)Decrease by $1,600
• C)Increase by $5,500
• D)Decrease by $6,500

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Definitions:

Rest-And-Digest

The rest-and-digest response, also known as the parasympathetic response, is a physiological reaction that decreases stress and energy expenditure by slowing the heart rate and increasing intestinal and gland activity.

Sympathetic Nervous System

Part of the autonomic nervous system that controls the body's responses to stress or emergency situations, often referred to as the "fight or flight" system.

Fight-Or-Flight

A physiological reaction that occurs in response to a perceived harmful event, attack, or threat to survival.

Parasympathetic

Part of the autonomic nervous system that conserves energy and slows the heart rate, among other functions.