The Management of Bonga Corporation Is Considering Dropping Product D74F

question 6

Multiple Choice

The management of Bonga Corporation is considering dropping product D74F. Data from the company's accounting system for this product for last year appear below:
All fixed expenses of the company are fully allocated to products in the company's accounting system. Further investigation has revealed that $111,000 of the fixed manufacturing expenses and $103,000 of the fixed selling and administrative expenses are avoidable if product D74F is discontinued.
-According to the company's accounting system,what is the net operating income earned by product D74F? Include all costs in this calculation-whether relevant or not.

• A) ($58,000)
• B) ($440,000)
• C) $58,000
• D) $440,000

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Definitions:

Budget

An estimate of income and expenditure for a set period of time, often used to plan and control finances.

Dealing With Criticism

The ability to handle negative feedback constructively and use it as a tool for personal or professional growth.

Criticism

The expression of disapproval or the identification of faults, either constructively to encourage improvement or negatively.

Negative Message

A piece of communication that conveys bad news, disapproval, or a refusal in a tactful manner to the recipient.