The management of Farry Corporation is considering dropping product L$07.$ Data from the company$$s budget for the upcoming year appear below:

Sales

$ $830,000$

Variable expenses

$ $365,000$

Fixed manufacturing expenses

$ $291,000$

Fixed selling and administrative expenses

$ $166,000$

In the company's accounting system all fixed expenses of the company are fully allocated to products. Further investigation has revealed that $$186,000$ of the fixed manufacturing expenses and $$106,000$ of the fixed selling and administrative expenses are avoidable if product L$07$ is discontinued. The financial advantage $($disadvantage$)$ for the company of eliminating this product for the upcoming year would be:

Question $18$Answer

a$.$

$$173,000$

b$.$

$($$$173,000)$

c$.$

$$8,000$

d$.$

$($$$8,000)$