TB MC Qu$.13-64($Algo$)$ The management of Furrow Corporation...

The management of Furrow Corporation is considering dropping product LO$7$E$.$ Data from the company's budget for the upcoming year appear below:

Sales

Variable expenses

Fixed manufacturing expenses

$$920,000$

$$386,000$

$$368,000$

$$248,000$

In the company's accounting system all fixed expenses of the company are fully allocated to products. Further investigation has revealed th $$229,000$ of the fixed manufacturing expenses and $$190,000$ of the fixed selling and administrative expenses are avoidable if product $L07$ discontinued. The financial advantage $($disadvantage$)$ for the company of eliminating this product for the upcoming year would be:

Multiple Choice

$$(82,000)$

$$ $$115,000$

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