The Management of Zorrilla Corporation Is Considering Dropping Product R10C

Multiple Choice

The management of Zorrilla Corporation is considering dropping product R10C. Data from the company's accounting system appear below: All fixed expenses of the company are fully allocated to products in the company's accounting system. Further investigation has revealed that $42,000 of the fixed manufacturing expenses and $48,000 of the fixed selling and administrative expenses are avoidable if product R10C is discontinued.
-According to the company's accounting system, what is the net operating income earned by product R10C?

A) ($28,000)
B) $28,000
C) $135,000
D) ($135,000)