The Management of Furrow Corporation Is Considering Dropping Product L07E

question 149

Multiple Choice

The management of Furrow Corporation is considering dropping product L07E. Data from the company's budget for the upcoming year appear below: In the company's accounting system all fixed expenses of the company are fully allocated to products. Further investigation has revealed that $186,000 of the fixed manufacturing expenses and $106,000 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:

• A) $8,000
• B) ($173,000)
• C) ($8,000)
• D) $173,000

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Definitions:

Spermatids

Immature male gametes that form from the division of secondary spermatocytes during spermatogenesis in the testes.

Seminiferous Tubules

Narrow, coiled tubules within the testes where sperm production occurs.

Sperm Cells

Male reproductive cells responsible for fertilization of the female egg during reproduction.

Female Reproductive System

The collection of internal and external organs in females responsible for reproduction, including the ovaries, fallopian tubes, uterus, and vagina.