Lusk Corporation produces and sells 16,100 units of Product X each month. The selling price of Product X is $31 per unit, and variable expenses are $25 per unit. A study has been made concerning whether Product X should be discontinued. The study shows that $71,000 of the $111,000 in monthly fixed expenses charged to Product X would not be avoidable even if the product was discontinued. If Product X is discontinued, the monthly financial advantage (disadvantage) for the company of eliminating this product should be:
A) ($56,600)
B) $14,400
C) $54,400
D) ($54,400)

Question

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The Answer of Lusk Corporation produces and sells 16,100 units of Product X each month. The selling price of Product X is $31 per unit, and variable expenses are $25 per unit. A study has been made concerning whether Product X should be discontinued. The study shows that $71,000 of the $111,000 in monthly fixed expenses charged to Product X would not be avoidable even if the product was discontinued. If Product X is discontinued, the monthly financial advantage (disadvantage) for the company of eliminating this product should be:
A) ($56,600)
B) $14,400
C) $54,400
D) ($54,400)

Lusk Corporation Produces and Sells 16,100 Units of Product X