The management of Pooh Corporation is considering dropping product HNY. Data from the company's accounting system appear below:

Sales	$	807,500
Variable expenses	$	419,500
Fixed manufacturing expenses	$	274,400
Fixed selling and administrative expenses	$	234,200

All fixed expenses of the company are fully allocated to products in the company's accounting system. Further investigation has revealed that $194,000 of the fixed manufacturing expenses and $168,200 of the fixed selling and administrative expenses are avoidable if product HNY is discontinued.

Required:

1. What would be the financial advantage (disadvantage) of dropping HNY?

2. Should HNY be dropped?

• Yes

• No