1. The management of Roy Corporation is considering dropping product B91Z. Data from the company's accounting system appear below:

Sales $ 800,900

Variable expenses $ 425,000

Fixed manufacturing expenses $ 271,000

Fixed selling and administrative expenses $ 231,000

Net Loss ($126,100)

All fixed expenses of the company are fully allocated to products in the companys accounting system. Further investigation has revealed that $195,000 of the fixed manufacturing expenses and $185,000 of the fixed selling and administrative expenses are avoidable if product B91Z is discontinued.

a. What is the amount of Net Income/Loss if the product is discontinued? $_____________ __________________ Show your math work here and put net income or net loss in the second line.

b. What is the financial advantage (disadvantage) of discontinuing B910X? $_______________ ______________ (put advantage or disadvantage in the second line)

Show your math work here:

C. Should the product be discontinued? _________________