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: Sales$935,000?Variable expenses$411,500???Fixed manufacturing expenses$349,000?Fixed selling and administrative expenses$256,000???All fixed expenses of the company are fully allocated to products in the company's accounting system. Further investigation has revealed that $213,500 of the fixed manufacturing expenses and $124,500 of the fixed selling and administrative expenses are avoidable if product D74F is discontinued. What would be the financial advantage (disadvantage) from dropping product D74F?
A. ($185,500)
B. ($81,500)
C. $81,500
D. $185,500
Answer: A
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