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The management of Pooh Corporation is considering dropping product HNY. Data from the company's accounting system appear below: Sales Variable expenses Fixed manufacturing expenses Fixed
The management of Pooh Corporation is considering dropping product HNY. Data from the company's accounting system appear below: Sales Variable expenses Fixed manufacturing expenses Fixed selling and administrative expenses $ 769,600 $399,900 $261,800 $223,400 All fixed expenses of the company are fully allocated to products in the company's accounting system. Further investigation has revealed that $185,000 of the fixed manufacturing expenses and $160,300 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? The financial advantage (disadvantage) is 2. Should HNY be dropped? O Yes O No
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