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$830,000Variable expenses$390,000Fixed manufacturing expenses$266,000Fixed selling and administrative expenses$232,000All fixed expenses of the company are fully allocated to products in the company's accounting system. Further investigation has revealed that $111,000 of the fixed manufacturing expenses and $103,000 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. ($58,000)
B. ($226,000)
C. $226,000
D. $58,000
Answer: B
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