Answer | |
a |
|
Sales | $ 690,000 |
Less: Variable expenses | $ 305,000 |
Contribution margin | $ 385,000 |
Less: Fixed manufacturing expenses | $ 250,000 |
Less: Fixed selling and administrative expenses | $ 198,000 |
Net operating income (loss) | -$ 63,000 |
b | |
Loss in Contribution margin | -$ 385,000 |
Avoidable fixed manufacturing expenses | $ 197,000 |
Avoidable fixed selling and administrative expenses | $ 112,000 |
Financial (disadvantage) | -$ 76,000 |
The product should not be dropped | |
.Yes-your answer is correct.
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