The management of Wengel Corporation is considering dropping product B900. Data from the company's accounting system appear below Sales 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 $194,000 of the fixed manufacturing expenses and $168,200 of the fixed selling and administrative expenses are avoidable if product B90D is discontinued. $ 807,500 $ 419,500 $ 274,400 $ 234,200 Required: What would be the financial advantage (disadvantage) of dropping 890D? Should the product be dropped? Net operating income (loss) would by if product B90D were dropped Therefore, the product dropped

FINANCIAL ACCOUNTING
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ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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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 selling and administrative expenses
$ 807,500
$ 419,500
$274,400
$ 234,200
All fixed expenses of the company are fully allocated to products in the company's accounting system. Further investigation has
revealed that $194,000 of the fixed manufacturing expenses and $168,200 of the fixed selling and administrative expenses are
avoidable if product B900 is discontinued.
Required:
What would be the financial advantage (disadvantage) of dropping 890D? Should the product be dropped?
Not operating income (loss) would
by
it product B90D were dropped Therefore, the product
dropped
Show All Items
Transcribed Image Text: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 $ 807,500 $ 419,500 $274,400 $ 234,200 All fixed expenses of the company are fully allocated to products in the company's accounting system. Further investigation has revealed that $194,000 of the fixed manufacturing expenses and $168,200 of the fixed selling and administrative expenses are avoidable if product B900 is discontinued. Required: What would be the financial advantage (disadvantage) of dropping 890D? Should the product be dropped? Not operating income (loss) would by it product B90D were dropped Therefore, the product dropped Show All Items
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