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:
All fixed expenses of the company are fully allocated to products in the company's accounting system. Further investigation has revealed that $111,000 of the fixed manufacturing expenses and $103,000 of the fixed selling and administrative expenses are avoidable if product D74F is discontinued.
-According to the company's accounting system,what is the net operating income earned by product D74F? Include all costs in this calculation-whether relevant or not.
A) ($58,000)
B) ($440,000)
C) $58,000
D) $440,000

Question

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:
  All fixed expenses of the company are fully allocated to products in the company's accounting system. Further investigation has revealed that $111,000 of the fixed manufacturing expenses and $103,000 of the fixed selling and administrative expenses are avoidable if product D74F is discontinued.
-According to the company's accounting system,what is the net operating income earned by product D74F? Include all costs in this calculation-whether relevant or not.
A) ($58,000) 
B) ($440,000) 
C) $58,000 
D) $440,000

Quizplus · Accepted Answer

11ea7761_1606_f916_81a5_310e4496e124_TB2580_00

The Management of Bonga Corporation Is Considering Dropping Product D74F