The Draper Corporation Is Considering Dropping Its Doombug Toy Due

Multiple Choice

The Draper Corporation is considering dropping its Doombug toy due to continuing losses. Data on the toy for the past year follow: If the toy were discontinued, Draper could avoid $8,000 per year in fixed costs. The remainder of the fixed costs are not avoidable.The annual financial advantage (disadvantage) for the company from discontinuing the production and sale of Doombugs would be:

A) ($30,000)
B) $10,000
C) ($22,000)
D) $18,000