Ram Co. is trying to decide whether or not to discontinue one of its products, slow cookers. Last year'ssales and expenses forslow cookersare as follows:

Sales$65,000

Less expenses: 83,000

Variable costs $35,000

Fixed costs 48,000

Net operating loss $(18,000)

If slow cookers are discontinued, 75% of the fixed costs can be avoided. At the same time, discontinuing slow cookers will have no effect on other products. What is the financial advantage or disadvantageof discontinuing slow cookers?

Multiple Choice

• $17,000 financial advantage
• $6,000 financial advantage
• $13,000 financial disadvantage
• $4,000 financial disadvantage