The management of Wengel Corporation is considering dropping product B90D. Data from the company's accounting...
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Accounting
The management of Wengel Corporation is considering dropping product B90D. Data from the company's accounting system appear below: Sales $ 728,200 Variable expenses $ 378,300 Fixed manufacturing expenses $ 247,800 Fixed selling and administrative expenses $ 211,400 All fixed expenses of the company are fully allocated to products in the company's accounting system. Further investigation has revealed that $175,000 of the fixed manufacturing expenses and $151,700 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?
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