Kule,Inc.produces three different lines of car racks for transporting large,bulky items.
Included in the cost of goods sold is $120,000 of annual rent (a fixed cost) that is distributed equally among the three product lines.
-Refer to Kule,Inc.What will be the effect on total net profit for the company if the line of bicycle racks is dropped?
A) Total net profit will decrease by $10,000.
B) Total net profit will increase by $30,000.
C) Total net profit will increase by $10,000.
D) Total net profit will decrease by $70,000.
Correct Answer:
Verified
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