Balser Corporation manufactures and sells a number of products, including a product called JYMP. Results for last year for the manufacture and sale of JYMPs are as follows: Sales $960,000 Less expenses: Variable production costs$464,000 Sales commissions 144,000 Salary of product manager 100,000 Fixed product advertising 160,000 Fixed manufacturing overhead 132,000 1,000,000 Net operating loss $ (40,000)?Balser is trying to decide whether to discontinue the manufacture and sale of JYMPs. All expenses other than fixed manufacturing overhead are avoidable if the product is dropped. None of the fixed manufacturing overhead is avoidable.Assume that dropping Product JYMP will have no effect on other products. The annual
financial advantage (disadvantage) for the company of eliminating this product should be:
A. ($132,000)
B. ($172,000)
C. $40,000
D. ($92,000)
Answer: D
You might also like to view...
Which of the following elements listed is one of the three basic elements of the fraud motivation triangle?
a. Concealment b. Theft Act c. Opportunity d. Conversion
A census can greatly decrease nonsampling error
Indicate whether the statement is true or false
A presentment is a demand for the acceptance of a dishonored instrument
Indicate whether the statement is true or false
E-procurement:
A) works best in long-term contract situations but is not suited for auctions. B) is purchasing facilitated through the Internet. C) has many benefits but requires a lot of paperwork. D) is illegal in all states except Nevada and New Jersey. E) All of the above are true of e-procurement.