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: Sales $ 920,000 Variable expenses $ 404,000 Fixed manufacturing expenses $ 334,000 Fixed selling and administrative expenses $ 241,000 All fixed expenses of the company are fully allocated to products in the company's accounting system. Further investigation has revealed that $206,000 of the fixed manufacturing expenses and $117,000 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?
$193,000
$59,000
($59,000)
($193,000)
Correct answer----------($193,000)
Working
| Before discontinue | After Discontinue | Change in net income | |
| Sales | $ 920,000 | ||
| Variable Costs | $ 404,000 | ||
| Contribution Margin | $ 516,000 | $ 0 | |
| Fixed Expenses | $ 575,000 | $ 252,000 | |
| Net Operating Income | -$ 59,000 | -$ 252,000 | -$ 193,000 |
.If the product is discontinued then Unavoidable fixed cost still be incurred so the loss will increase to $252000 hence loss will increse by $193000
The management of Bonga Corporation is considering dropping product D74F. Data from the company's accounting system...
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: Sales $ 920,000 Variable expenses $ 404,000 Fixed manufacturing expenses $ 334,000 Fixed selling and administrative expenses $ 241,000 All fixed expenses of the company are fully allocated to products in the company's accounting system. Further investigation has revealed that $206,000 of the fixed manufacturing expenses and $117,000 of the fixed selling and administrative expenses are...
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: Sales $ 923,000 Variable expenses $ 405,500 Fixed manufacturing expenses $ 337,000 Fixed selling and administrative expenses $ 244,000 All fixed expenses of the company are fully allocated to products in the company's accounting system. Further investigation has revealed that $207,500 of the fixed manufacturing expenses and $118,500 of the fixed selling and administrative expenses are...
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: Sales $ 935,000 Variable expenses $ 414,000 Fixed manufacturing expenses $ 349,000 Fixed selling and administrative expenses $ 256,000 All fixed expenses of the company are fully allocated to products in the company's accounting system. Further investigation has revealed that $216,000 of the fixed manufacturing expenses and $127,000 of the fixed selling and administrative expenses are...
The management of Wengel Corporation is considering dropping product B90D. Data from the company's accounting system appear below: Sales $ 803,200 Variable expenses $ 417,300 Fixed manufacturing expenses $ 273,000 Fixed selling and administrative expenses $ 233,000 All fixed expenses of the company are fully allocated to products in the company's accounting system. Further investigation has revealed that $193,000 of the fixed manufacturing expenses and $167,300 of the fixed selling and administrative expenses are avoidable if product B90D is discontinued....
The management of Wengel Corporation is considering dropping product B90D. Data from the company's accounting system appear below: Sales$803,200 Variable expenses$417,300 Fixed manufacturing expenses$273,000 Fixed selling and administrative expenses$233,000 All fixed expenses of the company are fully allocated to products in the company's accounting system. Further investigation has revealed that $193,000 of the fixed manufacturing expenses and $167,300 of the fixed selling and administrative expenses are avoidable if product B90D is discontinued. Required: What would be the financial advantage...
TB MC Qu. 12-110 The management of Bonga Corporation ... 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: Sales $ 940,000 Variable expenses $ 419,000 Fixed manufacturing expenses $ 354,000 Fixed selling and administrative expenses $ 261,000 All fixed expenses of the company are fully allocated to products in the company's accounting system. Further investigation has revealed that $221,000 of the fixed manufacturing expenses...
The management of Wengel Corporation is considering dropping product B90D. Data from the company's accounting system appear below: Sales $ 790,300 Variable expenses $ 410,700 Fixed manufacturing expenses $ 268,800 Fixed selling and administrative expenses $ 229,400 All fixed expenses of the company are fully allocated to products in the company's accounting system. Further investigation has revealed that $190,000 of the fixed manufacturing expenses and $164,600 of the fixed selling and administrative expenses are avoidable if product B90D is discontinued....
The management of Wengel Corporation is considering dropping product B90D. Data from the company's accounting system appear below: Sales $ 790,300 Variable expenses $ 410,700 Fixed manufacturing expenses $ 268,800 Fixed selling and administrative expenses $ 229,400 All fixed expenses of the company are fully allocated to products in the company's accounting system. Further investigation has revealed that $190,000 of the fixed manufacturing expenses and $164,600 of the fixed selling and administrative expenses are avoidable if product B90D is discontinued....
The management of Wengel Corporation is considering dropping product B90D. Data from the company's accounting system appear below: Sales$ 840,700Variable expenses$ 436,800Fixed manufacturing expenses$ 285,600Fixed selling and administrative expenses$ 243,800 All fixed expenses of the company are fully allocated to products in the company's accounting system. Further investigation has revealed that $202,000 of the fixed manufacturing expenses and $175,100 of the fixed selling and administrative expenses are avoidable if product B90D is discontinued. Required:What would be the financial advantage (disadvantage)...
Suire Corporation is considering dropping product D14E. Data from the company's accounting system appear below: Sales $ 600,000 Variable expenses $ 241,000 Fixed manufacturing expenses $ 232,000 Fixed selling and administrative expenses $ 180,000 All fixed expenses of the company are fully allocated to products in the company's accounting system. Further investigation has revealed that $192,500 of the fixed manufacturing expenses and $107,500 of the fixed selling and administrative expenses are avoidable if product D14E is discontinued. Required: a. According...