Question

A study has been conducted to determine if Product A should be dropped. Sales of the product total $230,000 per year, variable expenses total $151,000 per year. Fixed expenses charged to the product total $103,500 per year. The company estimates that $46,000 of these fixed expenses will continue even if the product is dropped. These data indicate that if Product A is dropped, the company's overall net operating income would Multiple Choice increase by $34,500 per year. decrease by $11,500 per year increase by $23,000 per year. decrease by $23,000 per year.

          A study has been conducted to determine if Product A should be dropped. Sales of the product total $230,000 per year, variable expenses total $151,000 per year. Fixed expenses charged to the product total $103,500 per year. The company estimates that $46,000 of these fixed expenses will continue even if the product is dropped. These data indicate that if Product A is dropped, the company's overall net operating income would
Multiple Choice
increase by $34,500 per year.
decrease by $11,500 per year
increase by $23,000 per year.
decrease by $23,000 per year.

A study has been conducted to determine if Product A should be dropped. Sales of the product total 230,000 per year, variable expenses total151,000 per year. Fixed expenses charged to the product total 103,500 per year. The company estimates that46,000 of these fixed expenses will continue even if the product is dropped. These data indicate that if Product A is dropped, the company's overall net operating income would
Multiple Choice
increase by 34,500 per year.
decrease by11,500 per year
increase by 23,000 per year.
decrease by23,000 per year.

Added by Debbie S.

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