The management of Bonga Corporation is considering dropping product D74F. Data from the company's accounting system for this product for last year appear below:

Sales	$ 931,000
Variable expenses	$ 409,500
Fixed manufacturing expenses	$ 345,000
Fixed selling and administrative expenses	$ 252,000

All fixed expenses of the company are fully allocated to products in the company's accounting system. Further investigation has revealed that $211,500 of the fixed manufacturing expenses and $122,500 of the fixed selling and administrative expenses are avoidable if product D74F is discontinued.

What would be the financial advantage (disadvantage) from dropping product D74F?

Multiple Choice

($187,500)

$187,500

$75,500

($75,500)