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A study has been conducted to determine if Product A should be dropped. Sales of the product total $248,000 per year, variable expenses total $173,600 per year. Fixed expenses charged to the product total $111,600 per year. The company estimates that $49,600 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 O O O O decrease by $24.800 per year Increase by $24,800 per year. Increase by $37.200 per year decrease by $12,400 per year

A study has been conducted to determine if Product A should be dropped. Sales of the product total $248,000 per year, variable expenses total $173,600 per year. Fixed expenses charged to the product total $111,600 per year. The company estimates that $49,600 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 O O O O decrease by $24.800 per year Increase by $24,800 per year. Increase by $37.200 per year decrease by $12,400 per year

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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A study has been conducted to determine if Product A should be dropped. Sales of the product total $248,000 per year; variable expenses total $173,600 per year. Fixed expenses charged to the product total $111,600 per year. The company estimates that $49,600 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 decrease by $24.800 per year. Increase by $24,800 per year. Increase by $37,200 per year. decrease by $12,400 per year.
Transcribed Image Text:A study has been conducted to determine if Product A should be dropped. Sales of the product total $248,000 per year; variable expenses total $173,600 per year. Fixed expenses charged to the product total $111,600 per year. The company estimates that $49,600 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 decrease by $24.800 per year. Increase by $24,800 per year. Increase by $37,200 per year. decrease by $12,400 per year.
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