Question
The management of Walsh Corporation is considering dropping product D74F. Data from the company's accounting system for this product for last year appear below:
The management of Walsh Corporation is considering dropping product D74F. Data from the company's accounting system for this product for last year appear below: Sales Variable expenses Fixed manufacturing expenses $830,000 $390,000 $266,000 Fixed selling and administrative expenses $232,000 All fixed expenses of the company are fully allocated to products in the company's accounting system. Further investigation has revealed that $111,000 of the fixed manufacturing expenses and $103,000 of the fixed selling and administrative expenses are avoidable if product D74F is discontinued. What would be the financial advantage (disadvantage) from dropping product D74F? Select one: O a. $226,000 O b. $58,000 O c. ($58,000) O d. ($226,000)
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