Suire Corporation is considering dropping product D14E. Data from the company's accounting system appear below:
Sales $ 800,000
Variable expenses $ 381,000
Fixed manufacturing expenses $ 263,000
Fixed selling and administrative expenses $ 211,000
All fixed expenses of the company are fully allocated to products in the company's accounting system. Further investigation has revealed that $202,500 of the fixed manufacturing expenses and $117,500 of the fixed selling and administrative expenses are avoidable if product D14E is discontinued.
Required:
a. According to the company's accounting system, what is the net operating income earned by product D14E? (Net losses should be indicated by a minus sign.)
b. What would be the financial advantage (disadvantage) of dropping product D14E? Should the product be dropped?
Answers (1)
Know the Answer?
Not Sure About the Answer?
Find an answer to your question ✅ “Suire Corporation is considering dropping product D14E. Data from the company's accounting system appear below: Sales $ 800,000 Variable ...” in 📘 Business if you're in doubt about the correctness of the answers or there's no answer, then try to use the smart search and find answers to the similar questions.
Search for Other Answers
You Might be Interested in
You and your sister are planning a large anniversary party 3 years from today for your parents' 50th wedding anniversary. you have estimated that you will need $6,500 for this party. you can earn 2.6 percent compounded annually on your savings.
Answers (1)
What happens to the total amount of premium paid for an insurance policy when the payment frequency increases? A. No difference in cost B. Decreases C. Increases D. Depends on the type of coverage
Answers (1)
Indigo Company invests $11,700,000 in 4% fixed rate corporate bonds on January 1, 2020. All the bonds are classified as available-for-sale and are purchased at par.
Answers (1)
Weaver Company's predetermined overhead rate is $21.00 per direct labor-hour and its direct labor wage rate is $15.00 per hour. The following information pertains to Job A-200: Direct materials $230 Direct labor $150 Required: 1.
Answers (1)
When dealing with babies Bottle-propping should be avoided because A. it can cause indigestion. B. some babies don't like it. C. it prevents bonding between baby and caregiver. D. it can lead to obesity.
Answers (2)
New Questions in Business
Adonis Corporation issued 10-year, 8% bonds with a par value of $200,000. Interest is paid semiannually. The market rate on the issue date was 7.5%. Adonis received $206,948 in cash proceeds. Which of the following statements is true? A.
Answers (1)
Which type of group leadership has a communication pattern that flows from the top down?
Answers (1)
Without trade, the farmer produced and consumed 2 pounds of pork and 4 pounds of tomatoes and the rancher produced and consumed 4 pounds of pork and 2 pounds of tomatoes.
Answers (1)
On March 14, Zest Co. accepted a 120-day, 6% note in the amount of $5,000 from AZC Co., a customer. On the due date of the note, AZC dishonors the note and fails to pay.
Answers (1)
A building with a book value of $54,000 is sold for $63,000 cash. Using the indirect method, this transaction should be shown on the statement of cash flows as an increase of a.
Answers (1)