10:2 The management of Kabanuck Corporation is considering dropping product V41B

Question

10:2

The management of Kabanuck Corporation is considering dropping product V41B. Data from the company's accounting system appear below: All fixed expenses of the company are fully allocated to products in the company's accounting system. Further investigation has revealed that $184,000 of the fixed manufacturing expenses and $200,000 of the fixed selling and administrative expenses are avoidable if product V41B is discontinued. According to the company's accounting system, what is the net operating income earned by product V41B? Include all costs in this calculation whether relevant or not.

Explanation / Answer

correct option is "D" - -71000

[Operating income = 890000-374000-329000-258000]

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