Sunshine Products Is a Multiproduct Firm

question 45

Multiple Choice

Sunshine Products is a multiproduct firm. The revenues of a single product are $200 000 when 10 000 units are sold. Variable costs are $16 per unit. Direct fixed expenses of $25 000 consist primarily of depreciation on equipment specialised to the product. By what amount will Sunshine Products' cash flow change if the product is dropped?

• A) $200 000 decrease
• B) $160 000 decrease
• C) $40 000 decrease
• D) $15 000 decrease

---

Definitions:

High LPC

stands for High Least Preferred Coworker score, indicating a leadership style that is more relationship-oriented and concerned with maintaining good interpersonal relations.

Idealized Influence

A leadership approach where leaders earn respect and admiration, inspiring followers through their vision and personal behavior.

Transformational Leadership

A style of leadership that inspires and stimulates followers to exceed their own interests for a collective purpose.

Intellectual Stimulation

The aspect of leadership that involves encouraging followers to be innovative and creative, challenging their own beliefs and valuing those which are rational.