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Percy Productions Has Three Models: D, E, and F

Question 144

Multiple Choice

Percy Productions has three models: D, E, and F. The following information is available: Percy Productions has three models: D, E, and F. The following information is available: Percy Productions is thinking of discontinuing model F because it is reporting an operating loss. All fixed costs are unavoidable. Assuming Percy Productions discontinues line F and is able to double the production and sales of model E without increasing fixed costs. What effect will this have on operating income? A) Increase $12,000 B) Decrease $12,000 C) Increase $33,000 D) Decrease $33,000 Percy Productions is thinking of discontinuing model F because it is reporting an operating loss. All fixed costs are unavoidable. Assuming Percy Productions discontinues line F and is able to double the production and sales of model E without increasing fixed costs. What effect will this have on operating income?


A) Increase $12,000
B) Decrease $12,000
C) Increase $33,000
D) Decrease $33,000

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