Question
28.Management is considering dropping product line A. If it is discontinued, $18,000 of its fixed costs are DTFC & can be avoided. The discontinuation of
28.Management is considering dropping product line A. If it is discontinued, $18,000 of its fixed costs are DTFC & can be avoided. The discontinuation of product line A would:
a.
increase Tremaine net income by $13,000.
b.
increase Tremaine net income by $21,000.
c.
decrease Tremaine net income by $2,000.
d.
increase Tremaine net income by $2,500.
29.Management is considering dropping product line A. If it is discontinued, (1) all of its fixed costs are common FC & cannot be avoided and (2) sales of Product B will increase by 60%. The discontinuation of product line A would:
a.
increase Tremaine net income by $13,000.
b.
increase Tremaine net income by $21,000.
c.
decrease Tremaine net income by $2,000.
d.
increase Tremaine net income by $2,500.
30.Management is considering dropping product line A. If it is discontinued, (1) all of its fixed costs are common FC & cannot be avoided and (2) the selling price of Product C will increase by 25%. The discontinuation of product line A would:
a.
increase Tremaine net income by $13,000.
b.
increase Tremaine net income by $21,000.
c.
decrease Tremaine net income by $2,000.
d.
increase Tremaine net income by $2,500.
31.In resource utilization (Product-Mix) decisions, managers should:
a.
minimize the contribution margin per unit.
b.
minimize the use of the scarce resource.
c.
maximize the contribution margin per unit of scarce resource.
d.
maximize the contribution margin per unit.
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