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The management of a company is considering dropping product Ziggy. Data from the company's accounting system appear below: Sales Variable expenses Fixed manufacturing expenses
The management of a company is considering dropping product Ziggy. Data from the company's accounting system appear below: Sales Variable expenses Fixed manufacturing expenses Fixed selling and administrative expenses $840,700 $436,800 $285,600 $243,800 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 $175,100 of the fixed selling and administrative expenses are avoidable if product Ziggy is discontinued. Required: What would be the profit (loss) of dropping Ziggy? Should the product be dropped? Net operating income (loss) would by if product Ziggy were dropped. Therefore, the product dropped
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