The management of Wessel Corporation is considering dropping product B90D. Data from the company's accounting...
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Accounting
- The management of Wessel Corporation is considering dropping product B90D. Data from the company's accounting system appear below:
| Sales | $720,000 |
| Variable expenses | $374,000 |
| Fixed manufacturing expenses | $245,000 |
| Fixed selling and administrative expenses | $209,000 |
All fixed expenses of the company are fully allocated to products in the company's accounting system. Further investigation has revealed that $173,000 of the fixed manufacturing expenses and $150,000 of the fixed selling and administrative expenses are avoidable if product B90D is discontinued.
Required:
How much is the financial advantage (disadvantage) of dropping B90D?
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