Hughes Corporation produces and sells 10,000 units of perfume each month. The selling price is...
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Accounting
Hughes Corporation produces and sells 10,000 units of perfume each month. The selling price is $40 per unit and its variable expenses are $32 per unit. In considering whether to continue producing the perfume, it was determined that $70,000 of the $120,000 in monthly fixed expenses charged to the perfume division would not be avoidable even if the product was discontinued. If the perfume division is discontinued, what would the annual financial advantage (disadvantage) be for Hughes from eliminating this product?
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