The Management of Wengel Corporation Is Considering Dropping Product B90D

question 266

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 $177,000 of the fixed manufacturing expenses and $153,400 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?

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Definitions:

Ineffective Managers

Individuals in managerial roles who fail to generate desired outcomes, often due to lack of skills, poor communication, or inability to adapt to change.

Experience of Flow

A mental state in which a person performing an activity is fully immersed in a feeling of energized focus, full involvement, and enjoyment in the process.

Strengths-Based Leadership

A leadership approach focusing on identifying and maximizing the individual strengths of team members to improve organization performance.

Managing by Objectives

A management strategy wherein employees and managers collaborate to identify and set clear objectives to be achieved within a specific timeframe.