Sales Less expenses: Variable production costs Sales commissions Salary of product manager Fixed product advertising $...

Transcribed Image Text:

Sales Less expenses: Variable production costs Sales commissions Salary of product manager Fixed product advertising $ 960,000 $464,000 144,000 100,000 160,000 Fixed manufacturing overhead i 132,000 1,000,000 Net operating loss (40,000) Baiser is trying to decide whether to discontinue the manufacture and sale of JYMPs. All expenses other than fixed manufacturing overhead are avoidable if the product is dropped. None of the fixed manufacturing overhead is avoidable. Assume that dropping Product JYMP would result in a $90,000 increase in the contribution margin of other products. If Baiser chooses to discontinue JYMP, the annual financial advantage (disadvantage) of eliminating this product should be Multiple Choice ($40,000) $40.000 O ($2,000) $50,000

Answer rating: 100% (QA)

The Answer is in the image, click to view ... View the full answer