amari, Inc is considering dropp 's budget for the upcoming year appear bela

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Ch. 13-The management of Tamari, Inc is considering dropping product S01S4UC3. Data
from the company's budget for the upcoming year appear below:
Sales
Variable expenses
Fixed manufacturing expenses
Fixed selling and administrative expenses
$ 930,000
$ 378,000
$360,000
$ 240,000
In the company's accounting system all fixed expenses of the company are fully allocated to
products. Further investigation has revealed that $115,000 of the fixed manufacturing
expenses and $102,000 of the fixed selling and administrative expenses are avoidable and can
be eliminated if product C04433 is discontinued. The financial advantage (disadvantage) for
the company of eliminating this product for the upcoming year would be:
($335,000)
$335,000
($552,000)
($165,000)
Transcribed Image Text:Ch. 13-The management of Tamari, Inc is considering dropping product S01S4UC3. Data from the company's budget for the upcoming year appear below: Sales Variable expenses Fixed manufacturing expenses Fixed selling and administrative expenses $ 930,000 $ 378,000 $360,000 $ 240,000 In the company's accounting system all fixed expenses of the company are fully allocated to products. Further investigation has revealed that $115,000 of the fixed manufacturing expenses and $102,000 of the fixed selling and administrative expenses are avoidable and can be eliminated if product C04433 is discontinued. The financial advantage (disadvantage) for the company of eliminating this product for the upcoming year would be: ($335,000) $335,000 ($552,000) ($165,000)
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