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The management of Wengel Corporation is considering dropping product B90D. Data from the company's accounting system appear below: Sales Variable expenses Fixed manufacturing expenses Fixed
The management of Wengel Corporation is considering dropping product B90D. Data from the company's accounting system appear below: Sales Variable expenses Fixed manufacturing expenses Fixed selling and administrative expenses $782,100 $ 406,400 $266,000 $227,000 All fixed expenses of the company are fully allocated to products in the company's accounting system. Further investigation has revealed that $188,000 of the fixed manufacturing expenses and $162,900 of the fixed selling and administrative expenses are avoidable if product B90D is discontinued. Required: 1. What would be the financial advantage (disadvantage) of dropping B90D? The financial advantage (disadvantage) is $ 24,800 2. Should B90D be dropped? Yes No
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