Multiple Choice
The management of Bonga Corporation is considering dropping product D74F. Data from the company's accounting system for this product for last year appear below:
All fixed expenses of the company are fully allocated to products in the company's accounting system. Further investigation has revealed that $111,000 of the fixed manufacturing expenses and $103,000 of the fixed selling and administrative expenses are avoidable if product D74F is discontinued.
-What would be the financial advantage (disadvantage) from dropping product D74F?
A) $226,000
B) $58,000
C) ($226,000)
D) ($58,000)
Correct Answer:
Verified
Correct Answer:
Verified
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