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23. The product F500 has been considered a drag on profits at Vinson Company for some time, and the management is considering discontinuing the product
23. The product F500 has been considered a drag on profits at Vinson Company for some time, and the management is considering discontinuing the product altogether. Given below is data taken from the companys accounting system in relation to the sales and the variable expenses associated with this product along with all the fixed expenses. Further investigation has revealed that $41,000 of the fixed manufacturing expenses and $25,000 of the fixed selling and administrative expenses are avoidable if the product F500 is discontinued. What is the effect on the company's overall net operating income if the product F500 is dropped?
a)The overall net operating income will decrease by $10,000.
b)The overall net operating income will increase by $10,000.
c)The overall net operating income will decrease by $73,000.
d)The overall net operating income will increase by $73,000.
e)None of the above.
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