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Nutall Corporation is considering dropping product N28X. Data from the company's accounting system appear below: Sales Variable expense Fixed manufacturing expenses Fixed selling and administrative
Nutall Corporation is considering dropping product N28X. Data from the company's accounting system appear below: Sales Variable expense Fixed manufacturing expenses Fixed selling and administrative expense 710,000 $326,000 $254,000 $202,000 All fixed expenses of the company are fully allocated to products in the company's accounting system. Further investigation has revealed that $198,000 of the fixed manufacturing expenses and $113,000 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 earned by product N28X? (Input the amount as a positive value.) Net operating loss $ (72,000) 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 be decrease by $ 73,000
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