Multiple Choice

$226,000

$58,000

($226,000)

($58,000)

The management of Bonga Corporation is considering dropping product D74F. Data from the company's accounting systemfor this product for last year appear below: Sales Variable expenses Fixed manufacturing expenses Fixed selling and administrative expenses $830,000 $390,000 $266,000 $232,000 All fixed expenses of the company are fully allocated to products in the company's accounting system. Further investigation has revealed that $111,000 of the fixed manufacturing expenses and $103,000 of the fixed selling and administrative expenses are avoidable if product D74F is discontinued. What would be the financial advantage (disadvantage) from dropping product D74F