17. The management of Prix Company is considering dropping the product A90. The below table shows the sales and the variable expenses associated with this product along with all the fixed expenses. All fixed expenses of the company are fully allocated to products. Further investigation has revealed that $100,000 of the fixed manufacturing expenses and $81,000 of the fixed selling and administrative expenses are avoidable if the product A90 is discontinued. What is the effect on the company's overall net operating income if the product A90 is dropped? *

7 points

The overall net operating income will increase by $95,000

The overall net operating income will increase by $144,000

The overall net operating income will decrease by $95,000

The overall net operating income will decrease by $144,000

None of the above

Item Amount Sales $815,000 $490,000 Variable Expenses Fixed Manufacturing Expenses Fixed Selling and Administrative Expenses $300,000 $120,000