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The management of Bonga 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 Fixed selling and administrative expenses $938,000 $413,000 $352,000 $259,000 All fixed expenses of the company are fully allocated to products in the company's accounting system. Further investigation has revealed that $215,000 of the fixed manufacturing expenses and $126,000 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?

The management of Bonga 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 Fixed selling and administrative expenses $938,000 $413,000 $352,000 $259,000 All fixed expenses of the company are fully allocated to products in the company's accounting system. Further investigation has revealed that $215,000 of the fixed manufacturing expenses and $126,000 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?

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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The management of Bonga Corporation is considering dropping product D74F. Data from the company's accounting system for this product for last year appear below. Sales $938,000 $413,000 $352,000 $259,000 Variable expenses Fixed manufacturing expenses Fixed selling and administrative expenses All fixed expenses of the company are fully allocated to products in the company's accounting system. Further investigation has revealed that $215,000 of the fixed manufacturing expenses and $126,000 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? Multiple Choice $184,000 $86,000 (S86,000) (S184,000) O O O O
Transcribed Image Text:The management of Bonga Corporation is considering dropping product D74F. Data from the company's accounting system for this product for last year appear below. Sales $938,000 $413,000 $352,000 $259,000 Variable expenses Fixed manufacturing expenses Fixed selling and administrative expenses All fixed expenses of the company are fully allocated to products in the company's accounting system. Further investigation has revealed that $215,000 of the fixed manufacturing expenses and $126,000 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? Multiple Choice $184,000 $86,000 (S86,000) (S184,000) O O O O
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