Kule,IncProduces Three Different Lines of Car Racks for Transporting Large,bulky

question 138

Multiple Choice

Kule,Inc.produces three different lines of car racks for transporting large,bulky items. Included in the cost of goods sold is $12,000 of annual rent (a fixed cost) that is distributed equally among the three product lines.As a consultant to Kule,will you recommend that they drop the luggage rack line?

• A) No,dropping the line will actually decrease overall net profits.
• B) Yes,dropping the line will increase company net profits.
• C) No,dropping the line will result in increased fixed costs.
• D) Yes,dropping the line will reduce joint costs.
• E) Yes,dropping the line will reduce cost of goods sold and increase revenues.

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Definitions:

Atlatl

The atlatl is an ancient weapon used for throwing spears or darts, consisting of a shaft with a cup or spur at the end that propelled the spear with greater force.

Burin

A burin is a tool used for engraving or incising hard materials such as stone or metal, typically used in printmaking, jewelry design, and archaeology.

Denisovans

An extinct species or subspecies of archaic humans in the genus Homo, known from DNA evidence and a few fossils found in Siberia.

Mousterian Toolmakers

Prehistoric peoples associated with the Middle Paleolithic period, known for their stone tool technology used by Neanderthals and early modern humans.