The management of Wessel Corporation is considering dropping product B90D. Data from the company's accounting...
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Accounting
The management of Wessel Corporation is considering dropping product B90D. Data from the company's accounting system appear below:
Sales
$720,000
Variable expenses
$374,000
Fixed manufacturing expenses
$245,000
Fixed selling and administrative expenses
$209,000
All fixed expenses of the company are fully allocated to products in the company's accounting system. Further investigation has revealed that $173,000 of the fixed manufacturing expenses and $150,000 of the fixed selling and administrative expenses are avoidable if product B90D is discontinued.
Required:
How much is the financial advantage (disadvantage) of dropping B90D?
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