Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Nutall Corporation is considering dropping product N28X. Data from the company's accounting system regarding product N28X appear below: Nutall Corporation is considering dropping product N28x.
Nutall Corporation is considering dropping product N28X. Data from the company's accounting system regarding product N28X appear below:
Nutall Corporation is considering dropping product N28x. Data from the company's accounting system regarding product N28X appear below: 600,000 $ Sales Variable expense Fixed manufacturing expenses Fixed selling and administrative expense $ 241,000 $232.000 $ 180,000 All fixed expenses of the company are fully allocated to products in the company's accounting system. Further investigation has revealed that $192,500 of the fixed manufacturing expenses and $107,500 of the fixed selling and administrative expenses are avoidable if product N28X is discontinued. Required: a. According to the company's accounting system, what is the net operating income or loss earned by product N28X? (Input the amount as a positive value regardless of whether there is a net operating loss or net operating income.) Net operating loss $ 63,000 X b-1.What would be the effect on the company's overall net operating income of dropping product N28X? (Input the amount as a positive value.) Net operating income would decrease by $ 95,000 Nutall Corporation is considering dropping product N28x. Data from the company's accounting system regarding product N28X appear below: 600,000 $ Sales Variable expense Fixed manufacturing expenses Fixed selling and administrative expense $ 241,000 $232.000 $ 180,000 All fixed expenses of the company are fully allocated to products in the company's accounting system. Further investigation has revealed that $192,500 of the fixed manufacturing expenses and $107,500 of the fixed selling and administrative expenses are avoidable if product N28X is discontinued. Required: a. According to the company's accounting system, what is the net operating income or loss earned by product N28X? (Input the amount as a positive value regardless of whether there is a net operating loss or net operating income.) Net operating loss $ 63,000 X b-1.What would be the effect on the company's overall net operating income of dropping product N28X? (Input the amount as a positive value.) Net operating income would decrease by $ 95,000 b- 2. Should the product be dropped? No YesStep 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