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	$	924,000
Variable expenses	$	406,000
Fixed manufacturing expenses	$	338,000
Fixed selling and administrative expenses	$	245,000

All fixed expenses of the company are fully allocated to products in the company's accounting system. Further investigation has revealed that $208,000 of the fixed manufacturing expenses and $119,000 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?

Garrison 16e Rechecks 2017-11-13, 2017-12-15

Multiple Choice

• $191,000

• $65,000

• ($65,000)

• ($191,000)