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 All fixed expenses of the company are fully allocated to products in the company's accounting system. Further investigation has revealed that $179,000 of the fixed manufacturing expenses and $155,200 of the fixed selling and administrative expenses are avoidable if product B90D is discontinued. Required: What would be the financial advantage (disadvantage) of dropping B90D? Should the product be dropped? Net operating income (loss) would $ 745,000 $ 387,000 $ 253,400 $ 216, 200 decline increase by if product B90D were dropped. Therefore, the product dropped
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 All fixed expenses of the company are fully allocated to products in the company's accounting system. Further investigation has revealed that $179,000 of the fixed manufacturing expenses and $155,200 of the fixed selling and administrative expenses are avoidable if product B90D is discontinued. Required: What would be the financial advantage (disadvantage) of dropping B90D? Should the product be dropped? Net operating income (loss) would $ 745,000 $ 387,000 $ 253,400 $ 216, 200 decline increase by if product B90D were dropped. Therefore, the product dropped
College Accounting (Book Only): A Career Approach
13th Edition
ISBN:9781337280570
Author:Scott, Cathy J.
Publisher:Scott, Cathy J.
ChapterE: Departmental Accounting
Section: Chapter Questions
Problem 3P
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Question
![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
All fixed expenses of the company are fully allocated to products in the company's accounting system. Further investigation has
revealed that $179,000 of the fixed manufacturing expenses and $155,200 of the fixed selling and administrative expenses are
avoidable if product B90D is discontinued.
Required:
What would be the financial advantage (disadvantage) of dropping B90D? Should the product be dropped?
Net operating income (loss) would
$ 745,000
$ 387,000
$ 253,400
$216,200
decline
increase
by
if product B90D were dropped. Therefore, the product
dropped](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F41910f6d-1d2d-4fe2-bf7d-37dcb0588332%2Fc872823f-aa31-44d0-89ef-5f4be1b50a9f%2Fqzumm48_processed.jpeg&w=3840&q=75)
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
All fixed expenses of the company are fully allocated to products in the company's accounting system. Further investigation has
revealed that $179,000 of the fixed manufacturing expenses and $155,200 of the fixed selling and administrative expenses are
avoidable if product B90D is discontinued.
Required:
What would be the financial advantage (disadvantage) of dropping B90D? Should the product be dropped?
Net operating income (loss) would
$ 745,000
$ 387,000
$ 253,400
$216,200
decline
increase
by
if product B90D were dropped. Therefore, the product
dropped
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