COTB MC Qu. 13-66 (Algo) Assume that a company manufactures and... Assume that a cumpery manufactures and sells a variety of products.one of which it refers to us Product A. The company is considering dropping Product A because the income statement for this product is reporting a netuperating loss as shown below $500,00 $240,000 75,888 25.ee 349,089 168,080 Sales Variable expenses: Variable manufacturing expenses Sales commissions Shipping Total variable expenses Contribution margin Fixed expenses: Salary of product-Line manager Advertising for this product General factory overhead Depreciation on equipment Insurance on this product's inventaries Purchasing department Total Fixed expenses Net operating loss $ 65,000 35,600 25,00 2e, eae 8. Be 15,600 168, OH $ 18,0801 If Prucluct is dropped the company would transfer its product-ine manager to another department and discurtinue a search for a new manager that the company anticipated payrgasery of 349.000. The general factory overteed and purchasing department expenses are common costs that the company allocates to all of its products using total sales delers as the location tese. The equipment used to manufacture Product A does not wear out through use and it has no resele value. What is the financial avantage ciseantages of dropping Product Multiple Choice $168.000) $148,000) $ o o o o $8,000 $128000)