Moore Manufacturing has two major product lines, Gidgets and Gadgets. Income statements for the two product lines follow: If the Gidget product line were dropped, all of its product line fixed costs could be avoided. Should the Gidget product line be dropped, and why?
A) Yes, profits increase $75,000
B) No, profits decrease $45,000
C) No, profits decrease $55,000
D) No, profits decrease $175,000

Question

Moore Manufacturing has two major product lines, Gidgets and Gadgets. Income statements for the two product lines follow:  If the Gidget product line were dropped, all of its product line fixed costs could be avoided. Should the Gidget product line be dropped, and why?
A) Yes, profits increase $75,000 
B) No, profits decrease $45,000 
C) No, profits decrease $55,000 
D) No, profits decrease $175,000

Quizplus · Accepted Answer

The Answer of Moore Manufacturing has two major product lines, Gidgets and Gadgets. Income statements for the two product lines follow:  If the Gidget product line were dropped, all of its product line fixed costs could be avoided. Should the Gidget product line be dropped, and why?
A) Yes, profits increase $75,000 
B) No, profits decrease $45,000 
C) No, profits decrease $55,000 
D) No, profits decrease $175,000

Moore Manufacturing Has Two Major Product Lines, Gidgets and Gadgets