Each month Holston Army Ammunition Depot manufactures and sells 15,600 units of Product RDX. Holston...
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Accounting
Each month Holston Army Ammunition Depot manufactures and sells 15,600 units of Product RDX. Holston sells Product RDX for $26 per unit. Holston's variable expenses are $20 per unit. You have been asked to address whether Product RDX should be discontinued. You find that $73,000 of the $106,000 in monthly fixed expenses charged to Product RDX would not be avoidable even if the product was discontinued. If Product RDX is discontinued, the annual financial advantage (disadvantage) for the company of eliminating this product should be: Multiple Choice ($60,600) $12,400 $45,400
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