What would be the effect on the companys overall net

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Reference no: EM13588562

Nutall Corporation is considering dropping product N28X. Data from the company's accounting system appear below: Sales $ 670,000 Variable expense $ 295,000 Fixed manufacturing expenses $ 246,000 Fixed selling and administrative expense $ 194,000 All fixed expenses of the company are fully allocated to products in the company's accounting system. Further investigation has revealed that $196,000 of the fixed manufacturing expenses and $111,000 of the fixed selling and administrative expenses are avoidable if product N28X is discontinued.
Required:

a.According to the company's accounting system, what is the net operating income earned by product N28X? (Input the amount as a positive value. Omit the "tiny_mce_markerquot; sign in your response.)

b-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 "tiny_mce_markerquot; sign in your response.)

b-2.Should the product be dropped?

Reference no: EM13588562

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