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14 March, 15:36

The management of Bonga Corporation is considering dropping product D74F. Data from the company's accounting system for this product for last year appear below:

Sales $ 920,000

Variable expenses $ 404,000

Fixed manufacturing expenses $ 334,000

Fixed selling and administrative expenses $ 241,000

All fixed expenses of the company are fully allocated to products in the company's accounting system. Further investigation has revealed that $206,000 of the fixed manufacturing expenses and $117,000 of the fixed selling and administrative expenses are avoidable if product D74F is discontinued.

What would be the financial advantage (disadvantage) from dropping product D74F?

a. $193,000

b. $59,000

c. ($59,000)

d. ($193,000)

+4
Answers (1)
  1. 14 March, 16:20
    0
    mhm yeah
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