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The management of Woznick Corporation has been concerned for some time with the financial performance of its product V86O and has considered discontinuing it on several occasions.
Data from the company's accounting system appear below:
Sales ................................................................$150,000
Variable expenses ............................................$72,000
Fixed manufacturing expenses ........................$50,000
Fixed selling and administrative expenses ......$33,000
Question A. According to the company's accounting system, what is the net operating income earned by product V86O?
Question B. What would be the effect on the company's overall net operating income if product V86O were dropped?
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