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 $ 745,000 $ 387,000 $ 253,400 Fixed selling and administrative expenses $ 216,200 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 890D? Should the product be dropped? Net operating income (loss) would 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 $ 745,000 $ 387,000 $ 253,400 Fixed selling and administrative expenses $ 216,200 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 890D? Should the product be dropped? Net operating income (loss) would by if product B90D were dropped. Therefore, the product dropped
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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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
$ 745,000
$ 387,000
$ 253,400
$ 216,200
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
by
if product B90D were dropped. Therefore, the product
dropped
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