The Purple and Tan Company manufactures three things bread, peanut butter, and jelly. Data on sales and expenses for the past quarter follow:

	Total	Bread	Peanut Butter	Jelly
Sales	$453,750	$90,000	$57,500	$300,000
Variable manufacturing costs	$182,000	$27,000	$31,750	$120,000
Contribution margin	$271,750	$63,000	$25,750	$180,000
Fixed expenses
Advertising, traceable	$46,500	$10,000	$6,650	$30,000
Depreciation of equipment	$37,100	$6,000	$7,200	$23,000
Salaries of departmental managers	$57,500	$12,000	$8,500	$35,000
Allocated fixed expenses	$89,000	$18,000	$14,750	$60,000
Total fixed expenses	$230,100	$46,000	$37,100	$148,000
Net operating income (loss)	$41,650	$17,000	($11,350)	$32,000

Management is concerned about the continued losses shown by the peanut butter division and wants a recommendation as to whether or not the line should be discontinued. The special equipment used to produce peanut butter has no resale value and does not wear out.

What is the financial advantage or disadvantage per quarter to discontinuing the peanut butter line?

Multiple Choice

• $36,350 disadvantage

• $11,350 advantage

• $3,400 disadvantage

• $10,600 disadvantage