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Stella [2.4K]
3 years ago
11

A study has been conducted to determine if Product A should be dropped. Sales of the product total $224,000 per year; variable e

xpenses total $156,800 per year. Fixed expenses charged to the product total $100,800 per year. The company estimates that $44,800 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 $22,400 per year. increase by $22,400 per year. decrease by $11,200 per year.
Business
1 answer:
jek_recluse [69]3 years ago
7 0

Answer: Decrease by $11,200 per year.

Explanation:

First let's calculate the income if the product is not dropped.

Calculting income would be,

= Sales - Variable Costs - Fixed Costs

= 224,000 - 156,800 - 100,800

= -$33,600

Income(loss) would be a ($33,600) if the product is kept.

If the product is discontinued, it is given that $44,800 in fixed costs will still continue.

These fixed costs cannot be covered in part by the Sales because the product will be discontinued. So that means the net operating Income would simply be a $44,800 loss.

The difference between these 2 options is therefore,

= 44,800 - 33,600

= $11,200

This means that if Product A is stopped, the net operating income will decrease by a further $11,200 because there is no revenue to cover the fixed assets in part. The last option is correct.

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Answer:

The correct option is B

Explanation:

Rational economic decision is the process where the costs as well as the benefits of the various options are being compared in order to determine or evaluate the which option is rational. Rational decisions have total benefit greater than or equal to their cost. So, the rational economic decision concerned with the efficiency not with the fairness or equity.

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3 years ago
Match each type of savings account with its features
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8 0
3 years ago
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6 0
3 years ago
What term can be used to describe the situation where your fixed and variable expenses are higher than your net income.(1 point)
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The term that describes the situation where <em>fixed and variable </em><em>expenses</em><em> are higher than</em> net income is <em>D. dissaving.</em>

Dissaving happens when an individual is spending from either previous savings or borrowing to fund current expenses.

Dissaving is commoner with retirees than those currently employed. But it can also happen to currently-employed persons, whose expenses are more than their incomes. They should find strategies to stop the negative saving. Otherwise, their debts may be overbearing in future.

Thus, dissaving means negative saving or <em>spending more than income.</em>

Learn more: brainly.com/question/13954775

8 0
2 years ago
Mr. Baxter IV, would like to retire in 26 years. He would like to accumulate $1,500,000 at the time of retirement to live a cont
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Answer:

Monthly deposit=  $840.74

Explanation:

Giving the following information:

Number of periods= 26*12= 312 months

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6 0
3 years ago
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