Answered step by step
Verified Expert Solution
Question
1 Approved Answer
i need the answer please now QUESTION 1 5 points Tolal Corporation has two products ABI and AB2. The corporation is considering to drop products
i need the answer please now
QUESTION 1 5 points Tolal Corporation has two products ABI and AB2. The corporation is considering to drop products AB or AB2. Information from the company's accounting ty appear below: Products Sales Variable expenses Fixed manufacturing expenses Fixed selling and administrative expenses ABI $600,000 $330.000 $200.000 SI 50.000 AB2 $450,000 $200,000 $90.000 5360.000 All fixed expenses of the company are fully allocated to products in the company's accounting system. Further investigation has reveled that 20% of the faced manacturing expenses and 30% of the fixed selling and administrative expenses are avoidable if product ABI is discontinued. The investigation also shows that coe- third of the fixed manufacturing expenses and two-third of the fixed selling and administrative expenses are avoidable if product AB2 is discontinued Required: What is the set operating income earned by product ABI according to the company's accounting system? b. What is the net operating income earned by product AB2 according to the company's accounting system? 2. What is the financial advantage (disadvantage) of dropping product AB1?Should product AB1 be dropped? d. What is the financial advantage (disadvantage) of dropping product AB2? Should product AB be dropped Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started