The management of Furrow Corporation is considering dropping product L07E. Data from the company's budget for the upcoming year appear below: Sales Variable expenses Fixed manufacturing expenses Fixed selling and administrative expenses In the company's accounting system all fixed expenses of the company are fully allocated to products. Further investigation has revealed that $186,000 of the fixed manufacturing expenses and $106,000 of the fixed selling and administrative expenses are avoidable if product LO7E is discontinued. The financial advantage (disadvantage) for the company of eliminating this product for the upcoming year would be: Multiple Choice с $173,000 ($8,000) ($173,000) $830,000 $365,000 $ 291,000 $ 166,000 $8,000

The management of Furrow Corporation is considering dropping product L07E. Data from the company's budget for the upcoming year appear below: Sales Variable expenses Fixed manufacturing expenses Fixed selling and administrative expenses In the company's accounting system all fixed expenses of the company are fully allocated to products. Further investigation has revealed that $186,000 of the fixed manufacturing expenses and $106,000 of the fixed selling and administrative expenses are avoidable if product LO7E is discontinued. The financial advantage (disadvantage) for the company of eliminating this product for the upcoming year would be: Multiple Choice с $173,000 ($8,000) ($173,000) $830,000 $365,000 $ 291,000 $ 166,000 $8,000

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter7: Budgeting

Section: Chapter Questions

Problem 6TP: The management of Hess, Inc., is developing a flexible budget for the upcoming year. It was not...

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Concept explainers

Master Budget

A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.

Sales Budget and Selling

A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.

Question

The management of Furrow Corporation is considering dropping product L07E. Data from the company's budget for the upcoming year appear below:
Sales
Variable expenses
Fixed manufacturing expenses
Fixed selling and administrative expenses
In the company's accounting system all fixed expenses of the company are fully allocated to products. Further investigation has revealed that $186,000
of the fixed manufacturing expenses and $106,000 of the fixed selling and administrative expenses are avoidable if product L07E is discontinued. The
financial advantage (disadvantage) for the company of eliminating this product for the upcoming year would be:
Multiple Choice
O
O
$173,000
($8,000)
($173,000)
$ 830,000
$365,000
$ 291,000
$ 166,000
O $8,000

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Please do not give solution in image format thanku
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