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The management of a company is considering dropping a product line. Data from the company’s budget...

The management of a company is considering dropping a product line. Data from the company’s budget for the upcoming year for this product line appear below:

Sales Revenue: $950,000

Variable costs: $388,000

Fixed manufacturing costs: $370,000

Fixed selling and administrative costs: $250,000

Further investigation has revealed that $254,776 of the fixed manufacturing costs and $193,122 of the fixed selling and administrative expenses are avoidable if the product were discontinued. What is the total annual financial advantage (disadvantage) for the company from eliminating this product? (Round to the nearest dollar; use a positive number to indicate an advantage and a negative number to indicate a disadvantage.)

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Answer #1

The answer has been presenetd in the supporting sheet. For detailed answer refer to the supporting sheet.

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