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30. The management of RodCo is considering dropping product GQ10. Data from the company's accounting system appear below: Sales Variable Costs Fixed Manufacturing Costs Fixed
30. The management of RodCo is considering dropping product GQ10. Data from the company's accounting system appear below: Sales Variable Costs Fixed Manufacturing Costs Fixed Selling & Administrative Costs $400.000 150,000 120,000 90,000 All fixed expenses of the company are fully allocated to products in the company's accounting system. Further investigation has revealed that $50,000 of the fixed manufacturing expenses and $30,000 of the fixed selling and administrative expenses are avoidable if the product is discontinued. Required (Show your work): What would be the effect on the company's overall net operating income of dropping product the product? Should the product be dropped? Why
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