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Suire Corporation is considering dropping product D14E. Data from the company's accounting system appear below: Sales Variable expenses Fixed manufacturing expenses Fixed selling and administrative
Suire Corporation is considering dropping product D14E. Data from the company's accounting system appear below: Sales Variable expenses Fixed manufacturing expenses Fixed selling and administrative expenses $790,000 $376,000 $262,000 $210,000 All fixed expenses of the company are fully allocated to products in the company's accounting system. Further investigation has revealed that $202,000 of the fixed manufacturing expenses and $117.000 of the fixed selling and administrative expenses are avoidable if product D14E is discontinued Required: a. According to the company's accounting system, what is the net operating income earned by product D14E? (Net losses should be indicated by a minus sign.) b. What would be the financial advantage (disadvantage) of dropping product D14E? Should the product be dropped? a. Net operating income (loss) Financial advantage (disadvantage) The product dropped
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