$1$

The management of Wengel Corporation is considering dropping product B$90$D$.$ Data from the company's accounting system appear below:

Sales

Variable expenses

$$820,000$

Fixed manufacturing expenses $$426,000$

Fixed selling and administrative expenses $$278,600$

$,$$$237,800$

$04$:$59$:$27$

All fixed expenses of the company are fully allocated to products in the company's accounting system. Further investigation has revealed that $$197,000$ of the fixed manufacturing expenses and $$170,800$ of the fixed selling and administrative expenses are avoidable if product B$9$OD is discontinued.

Required:

What would be the financial advantage $($disadvantage$)$ of dropping B$90$D$?$ Should the product be dropped?

Net operating income $($loss$)$ would by

by $$ if product B$90$D were dropped. Therefore, the product $$ dropped