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Brewer Inc. produces and sells 14,800 units of Product K32. The selling price of Product K32 is $30 per unit, and variable expenses are $24
Brewer Inc. produces and sells 14,800 units of Product K32. The selling price of Product K32 is $30 per unit, and variable expenses are $24 per unit. A study has been made concerning whether Product K32 should be discontinued. The study shows that $74,000 fixed overhead charged to Product K32 would not be avoidable even if the product was discontinued. But $ 38,000 fixed advertising expense would be avoided. If Product K32 is discontinued, the financial advantage (disadvantage) for the company of eliminating this product should be: Multiple Choice ($61,200) $61,200 ($50,800) $23,200
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