The Management of Wengel Corporation Is Considering Dropping Product B90D

question 23

Essay

The management of Wengel Corporation is considering dropping product B90D. Data from the company's accounting system appear below:
All fixed expenses of the company are fully allocated to products in the company's accounting system. Further investigation has revealed that $173,000 of the fixed manufacturing expenses and $150,000 of the fixed selling and administrative expenses are avoidable if product B90D is discontinued.
Required:
What would be the financial advantage (disadvantage) of dropping B90D? Should the product be dropped? Show your work!

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Definitions:

Anesthetic

A substance used to induce anesthesia, temporarily eliminating sensation or pain in a part or the entirety of the body.

Needle Holder

Instrument used to hold a suture needle during the suturing process.

Sterile Field

A designated area, such as in a surgical environment, that is kept free of all microorganisms to reduce the risk of infection.

Loop Electrosurgical Excision Procedure (LEEP)

A medical procedure that uses a wire loop heated by electric current to remove abnormal tissues or cells from the cervix.