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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 $670,000 $295,000 $246,000 $ 194,000 All fixed expenses of the company are fully allocated to products in the company's accounting system. Further investigation has revealed that $196,000 of the fixed manufacturing expenses and $111,000 of the fixed selling and administrative expenses are avoidable if product N28X is discontinued. Required: a. According to the company's accounting system, what is the net operating income earned by product N28X? (Input the amount as a positive value. Omit the "$" sign in your response.) (Click to select) $ b- What would be the effect on the company's overall net operating income of dropping 1. product N28X? (Input the amount as a positive value. Omit the "$" sign in your response.) Net operating income would be (Click to select) by $ b- 2. Should the product be dropped? 0 No Yes
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