The management of Wengel Corporation is considering dropping product B90D. Data from the company's accounting system appearbelow:SalesVariable expensesFixed manufacturing expensesFixed selling and administrative expenses$803, 200$417,300$273,000$233,000All fixed expenses of the company are fully allocated to products in the company's accounting system. Further investigation hasrevealed that $193,000 of the fixed manufacturing expenses and $167,300 of the fixed selling and administrative expenses areavoidable if product B90D is discontinued.Required:1. What would be the financial advantage (disadvantage) of dropping B90D?米2. Should B90D be dropped?O YesO No

Contribution margin lost if product B90D is discontinue ($803200-$417300) -$3,85,900…

Answered: The management of Wengel Corporation is…

College Accounting (Book Only): A Career Approach

13th Edition

ISBN:9781337280570

Author:Scott, Cathy J.

Publisher:Scott, Cathy J.

ChapterE: Departmental Accounting

Section: Chapter Questions

Problem 3P

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The management of Wengel Corporation is considering dropping product B90D. Data from the company's accounting system appear below Sales Variable expenses Fixed manufacturing expenses Fixed selling and administrative expenses $ 807,500 $ 419,500 $274,400 $ 234,200 All fixed expenses of the company are fully allocated to products in the company's accounting system. Further investigation has revealed that $194,000 of the fixed manufacturing expenses and $168,200 of the fixed selling and administrative expenses are avoidable if product B900 is discontinued. Required: What would be the financial advantage (disadvantage) of dropping 890D? Should the product be dropped? Not operating income (loss) would by it product B90D were dropped Therefore, the product dropped Show All Items
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