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ABC Co. is considering dropping product A and provided the following Information. Sales Variable expenses Fixed manufacturing expenses Fixed administrative expenses $650,000 $280,000 $242,000
ABC Co. is considering dropping product A and provided the following Information. Sales Variable expenses Fixed manufacturing expenses Fixed administrative expenses $650,000 $280,000 $242,000 $190,000 If product A is discontinued, $195,000 of the fixed manufacturing expenses and $110,000 of the fixed administrative expenses can be avoided. Required: a. Calculate the net operating profit/loss earned/incurred by product A. b. Calculate the profit/loss of dropping product A. Indicate whether product A should be dropped. a. Net operating profit/loss b. Profit loss Product A dropped
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