The Management of Furrow Corporation Is Considering Dropping Product L07E

question 279

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 $239,000 of the fixed manufacturing expenses and $200,000 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) $(67,000)
• B) $120,000
• C) $67,000
• D) $(120,000)

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Definitions:

Attachment

An emotional bond that forms between individuals, typically between a child and caregiver, which influences the child's development and future relationships.

Intersexed

A term used to describe individuals born with physical sex characteristics that do not fit typical binary notions of male or female bodies.

Transsexual

A term describing a person whose gender identity differs from the sex they were assigned at birth, often undergoing medical procedures to transition.

Equal

Having the same value, quantity, or measure as another entity or condition.