A company is considering eliminating a product line. The fixed costs currently a

Question

A company is considering eliminating a product line. The fixed costs currently allocated to the product line will be allocated to other product lines upon discontinuance. If the product line is discontinued,



A total net income will increase by the amount of the product line's fixed costs.



B the contribution margin of the product line will indicate the net income increase or decrease.



C the company's total fixed costs will decrease.



D total net income will decrease by the amount of the product line's fixed costs.

Explanation / Answer

A company is considering eliminating a product line. The fixed costs currently allocated to the product line will be allocated to other product lines upon discontinuance. If the product line is discontinued,



A total net income will increase by the amount of the product line's fixed costs.



B the contribution margin of the product line will indicate the net income increase or decrease.



C the company's total fixed costs will decrease.



D total net income will decrease by the amount of the product line's fixed costs.

Related Questions

Navigate

• Browse (All)
• Browse A
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.