Question
Jean Express is considering dropping product yellow jeans. Data from the company's accounting system appear below Sales Variable Expenses Fixed Manufacturing Expenses Fixed Selling
Jean Express is considering dropping product yellow jeans. Data from the company's accounting system appear below Sales Variable Expenses Fixed Manufacturing Expenses Fixed Selling and Administrative Expenses $630,000 $ 300,000 $ 300,000 $ 250,000 All fixed expenses of the company are fully allocated to products in the company's accounting system. Further investigation has revealed that 22% of the fixed manufacturing expenses and 76% of the fixed selling and administrative expenses are avoidable if product yellow jeans is discontinued. Required: Should the company discontinue the yellow jeans product. Why or why not? Show your calculated analysis.
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