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The management of Farry Corporation is considering dropping product L 0 7 . Data from the company s budget for the upcoming year appear below:
The management of Farry Corporation is considering dropping product L Data from the companys budget for the upcoming year appear below:
Sales
$
Variable expenses
$
Fixed manufacturing expenses
$
Fixed selling and administrative expenses
$
In the company's accounting system all fixed expenses of the company are fully allocated to products. Further investigation has revealed that $ of the fixed manufacturing expenses and $ of the fixed selling and administrative expenses are avoidable if product L is discontinued. The financial advantage disadvantage for the company of eliminating this product for the upcoming year would be:
Question Answer
a
$
b
$
c
$
d
$
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