The management of Wengel Corporation is considering dropping product B$90$D$.$ Data from the company's accounting system appear

below:

All fixed expenses of the company are fully allocated to products in the company's accounting system. Further investigation has

revealed that $$202,000$ of the fixed manufacturing expenses and $$175,100$ of the fixed selling and administrative expenses are

avoidable if product B$90$D is discontinued.

Required:

What would be the financial advantage $($disadvantage$)$ of dropping B$90$D$?$ Should the product be dropped?

Answer is complete but not entirely correct.

Net operating income $($loss$)$

decline

by

$$98,700$

if product B$90$D were dropped. Therefore, the

product

should not be

dropped