Multiple Choice

$8,000

($173,000)

($8,000)

$173,000

The management of Furrow Corporation is considering dropping product LO7E. Data from the company's budget for the upcoming year appear below: Sales Variable expenses Fixed manufacturing expenses Fixed selling and administrative expenses $830,000 365,000 $291,000 $166,000 In the company's accounting system all fixed expenses of the company are fully allocated to products. Further investigation has revealed that $186,000 of the fixed manufacturing expenses and $106,000 of the fixed selling and administrative expenses are avoidable if product LO07E is discontinued. The financial advantage (disadvantage) for the company of eliminating this product for the upcoming year would be