Nutall Corporation is considering dropping product N28X. Data from the company\'
ID: 2500435 • Letter: N
Question
Nutall Corporation is considering dropping product N28X. 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 investigator has revealed trial $193,500 of the fixed manufacturing expenses and $108,500 of the fixed selling and administrative expenses are avoidable if product N28X is discontinued. According to the company's accounting system, what is the net operating income earned by product N28X? (Input the amount as a positive value.) What would be the effect on the company's overall net operating income of dropping product N28X? (Input the amount as a positive value.)Explanation / Answer
Nutall Corporation is consedring dropping product n28x . Data From the company accounting system appear below
Sales $620000
Variable exp $ 255000
Fixed manufacturing expense $236000
Fixe sellimg and administrative expense $1840000
Solution A
Sales 620000
Variable Exp -255000
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Contribution Margin = 365000
Fixed Expense
Fix manufacturing exp= 236000
Fix manufacturing Selling and admin exp= +184000
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total Fixed exp 420000
Net operating income (loss) =365000-42000
=55000 Lose
Solution B 1
Sales 620000
Variable Exp -255000
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Contribution Margin = 365000
Fixed Expense
Fix manufacturing exp(236000-193500) = 42500
Fix manufacturing Selling and admin exp(184000-108500) =+75500
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total Fixed exp 118000
Net operating income (loss) =365000-118000
=247000
Solution B-2
NO
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