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The management of Furrow Corporation is considering dropping product LO7E. 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 $385,000 $367,000 $247,000 In the company's accounting system all fixed expenses of the company are fully allocated to products, Further investigation has revealed that $227,000 of the fixed manufacturing expenses and $188,000 of the fixed selling and administrative expenses are avoidable if product LO7E is discontinued, The financial advantage (disadvantage) for the company of eliminating this product for the upcoming year would be: Multiple Choice S(69,000) 2130,000

The management of Furrow Corporation is considering dropping product LO7E. 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 $385,000 $367,000 $247,000 In the company's accounting system all fixed expenses of the company are fully allocated to products, Further investigation has revealed that $227,000 of the fixed manufacturing expenses and $188,000 of the fixed selling and administrative expenses are avoidable if product LO7E is discontinued, The financial advantage (disadvantage) for the company of eliminating this product for the upcoming year would be: Multiple Choice S(69,000) 2130,000

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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The management of Furrow Corporation is considering dropping product LO7E. 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 $385,000 $367,000 $247,000 In the company's accounting system all fixed expenses of the company are fully allocated to products, Further investigation has revealed that $227,000 of the fixed manufacturing expenses and $188,000 of the fixed selling and administrative expenses are avoidable if product L07E is discontinued. The financial advantage (disadvantage) for the company of eliminating this product for the upcoming year would be: Multiple Choice S(69,000) $130,000 $69.000 S(130,000) O O O O
Transcribed Image Text:The management of Furrow Corporation is considering dropping product LO7E. 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 $385,000 $367,000 $247,000 In the company's accounting system all fixed expenses of the company are fully allocated to products, Further investigation has revealed that $227,000 of the fixed manufacturing expenses and $188,000 of the fixed selling and administrative expenses are avoidable if product L07E is discontinued. The financial advantage (disadvantage) for the company of eliminating this product for the upcoming year would be: Multiple Choice S(69,000) $130,000 $69.000 S(130,000) O O O O
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