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The management of Walsh Corporation has been concerned for some time with the financial performance of its product V860 and has considered discontinuing it on
The management of Walsh Corporation has been concerned for some time with the financial performance of its product V860 and has considered discontinuing it on several occasions. Data from the company's accounting system for this product for last year appear below: Sales $150,000 Variable expenses $72,000 Fixed manufacturing expenses $50,000 Fixed selling and administrative expenses $33,000 In the company's accounting system all fixed expenses of the company are fully allocated to products. Further investigation has revealed that $30,000 of the fixed manufacturing expenses and $13,000 of the fixed selling and administrative expenses are avoidable if product V860 is discontinued. According to the company's accounting system, what is the net operating income earned by product V860? Include all costs in this calculation-whether relevant or not. Select one: a. ($5,000) O b. ($78,000) o c. $5,000 O d. $78,000 Blackberry Manufacturing budgeted sales on account of $180,000 for July, $230,000 for August, and $230,000 for September. Experience indicates that none of the sales on account will be collected in the month of the sale, 60% will be collected the month after the sale, 36% in the second month, and 4% will be uncollectible. The cash receipts from accounts receivable that should be budgeted for September would be: Select one: O a. $202,800 O b. $193,600 O c. $210,000 O d. $348,000
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