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Use the Information Below to Answer the Following Question(s)

Question 126

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Use the information below to answer the following question(s) :
Darren Company has three product lines: D, E, and F. The following information is available:
Use the information below to answer the following question(s) : Darren Company has three product lines: D, E, and F. The following information is available:    -Darren Company is thinking of dropping product line F because it is reporting an operating loss. All fixed expenses are unavoidable. Assuming Darren Company drops product line F and does not replace it, what affect will this have on operating income? A)  Increase $16,000 B)  Decrease $16,000 C)  Increase $1,000 D)  Decrease $1,000
-Darren Company is thinking of dropping product line F because it is reporting an operating loss. All fixed expenses are unavoidable. Assuming Darren Company drops product line F and does not replace it, what affect will this have on operating income?


A) Increase $16,000
B) Decrease $16,000
C) Increase $1,000
D) Decrease $1,000

Correct Answer:

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