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Suire Corporation is considering dropping product D14E. Data from the company's accounting system appear below: Sales $ 770,000 Variable expenses $ 356,000 Fixed manufacturing expenses

Suire Corporation is considering dropping product D14E. Data from the company's accounting system appear below: Sales $ 770,000 Variable expenses $ 356,000 Fixed manufacturing expenses $ 260,000 Fixed selling and administrative expenses $ 208,000 All fixed expenses of the company are fully allocated to products in the company's accounting system. Further investigation has revealed that $201,000 of the fixed manufacturing expenses and $116,000 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?

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