Wellco Corporation is concerned about the losses reported for its product V8 and is considering discontinuing it. Data related to this product for last year appears below:

Sales	$ 130,000
Variable Expenses	52,000
Contribution Margin	$ 78,000
Fixed Manufacturing Expenses	90,000
Fixed Selling and Administrative Expenses	35,000
Operating Income	$ (47000)

Further investigation has revealed that $45,000 of the fixed manufacturing expenses and $21,000 of the fixed selling and administrative expenses are avoidable if product V8 is discontinued.

What is the financial advantage (disadvantage) of dropping product V8?

Multiple Choice

• $(12000)

• $47000

• $(47000)

• $19000