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Information from a company's accounting system regarding a product is as follows: Sales Variable expenses Fixed manufacturing expenses Fixed selling and administrative expenses $815,700
Information from a company's accounting system regarding a product is as follows: Sales Variable expenses Fixed manufacturing expenses Fixed selling and administrative expenses $815,700 $423,800 $277,200 $236,600 The company is considering discontinuing the product and has gathered the following additional information. All fixed expenses of the company are fully allocated to products in the company's accounting system. If the product is discontinued, $196,000 of the fixed manufacturing expenses and $169,900 of the fixed selling and administrative expenses are avoidable. Required: Calculate the financial advantage (disadvantage) of dropping the product. Should it be dropped? Not operating income (loss) would by if the product were dropped. Therefore, the product
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