Wengel Corporation management is considering discontinuing the B90D product. The data from the company's accounting system is shown below:

Sales	ps	740,700
Variable expends	ps	384,800
Fixed manufacturing costs	ps	252,000
Fixed selling and administrative expenses	ps	215,000

All fixed company expenses are fully allocated to products in the company's accounting system. Further investigation has revealed that $178,000 of fixed manufacturing costs and $154,300 of fixed selling and administrative costs can be avoided if the B90D product is discontinued.

Required:

What would be the financial advantage (disadvantage) of abandoning B90D? Should the product be discarded?

Net operating income (loss) would (decrease or increase) by $____ if product B90D were discontinued. Therefore, the product (should/should not) be dropped

Answer rating: 100% (QA)

The financial advantage disadvantage of abandoning the B90D product can be calculated as foll... View the full answer