Mission Company has three product lines: D, E, and F. The following information is available: Mission Company is thinking of discontinuing product line F because it is reporting an operating loss. All fixed expenses are unavoidable. Assuming Mission Company discontinues product line F and does not replace it, what affect will this have on operating income?
A)Increase $10,000
B)Increase $17,000
C)Increase $7000
D)Decrease $7000

Question

Mission Company has three product lines: D, E, and F. The following information is available:  Mission Company is thinking of discontinuing product line F because it is reporting an operating loss. All fixed expenses are unavoidable. Assuming Mission Company discontinues product line F and does not replace it, what affect will this have on operating income?
A)Increase $10,000 
B)Increase $17,000 
C)Increase $7000 
D)Decrease $7000

Quizplus · Accepted Answer

The Answer of Mission Company has three product lines: D, E, and F. The following information is available:  Mission Company is thinking of discontinuing product line F because it is reporting an operating loss. All fixed expenses are unavoidable. Assuming Mission Company discontinues product line F and does not replace it, what affect will this have on operating income?
A)Increase $10,000 
B)Increase $17,000 
C)Increase $7000 
D)Decrease $7000

Mission Company Has Three Product Lines: D, E, and F