The Management of Austin Corporation Is Considering Dropping Product R97C

question 108

Multiple Choice

The management of Austin Corporation is considering dropping product R97C.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 $34,000 of the fixed manufacturing expenses and $20,000 of the fixed selling and administrative expenses are avoidable if product R97C is discontinued.What would be the effect on the company's overall net operating income if product R97C were dropped?

• A)Overall net operating income would increase by $20,000.
• B)Overall net operating income would increase by $10,000.
• C)Overall net operating income would decrease by $20,000.
• D)Overall net operating income would decrease by $10,000.

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Definitions:

Role Conflict

A situation in which an individual faces competing expectations from different roles they are required to fulfill.

Divided Loyalties

A situation where an individual's allegiances are split among different groups or interests, leading to potential conflict.

Cross-Functional Project Team

A group composed of members from different departments or areas of expertise working together towards a common project goal.

External Coordination

The process of aligning activities, efforts, and strategies with entities or organizations outside one's own to achieve collective goals.