The management of Furrow Corporation is considering dropping product LO7E. Data from the company's budget...
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The management of Furrow Corporation is considering dropping product LO7E. Data from the company's budget for the upcoming year appear below: Sales Variable expenses Fixed manufacturing expenses Fixed selling and administrative expenses $960,000 $397,000 379,000 $259,000 In the company's accounting system all fixed expenses of the company are fully allocated to products. Further investigation has revealed that $251,000 of the fixed manufacturing expenses and $212,000 of the fixed selling and administrative expenses are avoidable if product LO7E is discontinued. The financial advantage (disadvantage) for the company of eliminating this product for the upcoming year would be: Multiple Choice $(75,000) Roberts Enterprises has budgeted sales in units for the next five months as follows: June July August September October 4,560 units 7,400 units 5,360 units 6,820 units 3,760 units Past experience has shown that the ending inventory for each month must be equal to 10% of the next month's sales in units. The inventory on May 31 contained 456 units. The company needs to prepare a production budget for the second quarter of the year The total number of units to be produced in July is Multiple Choice 7196 units
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