What would be the effect on the companys overall net

Reference no: EM13568995

Nutall Corporation is considering dropping product N28X. Data from the company's accounting system appear below:


Sales	$	730,000
Variable expense	$	336,000
Fixed manufacturing expenses	$	256,000
Fixed selling and administrative expense	$	204,000

All fixed expenses of the company are fully allocated to products in the company's accounting system. Further investigation has revealed that $199,000 of the fixed manufacturing expenses and $114,000 of the fixed selling and administrative expenses are avoidable if product N28X is discontinued.

Required:

1.	What would be the effect on the company's overall net operating income of dropping product N28X? (Input the amount as a positive value. Omit the "$" sign in your response.)

Net operating income would be (Click to select)increasedecrease by $ .

Should the product be dropped?

Reference no: EM13568995

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