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!
Definitions:
Maintaining Confidentiality
The ethical duty of professionals to protect private information shared by clients, ensuring it is not disclosed without consent.
Trust
The firm belief in the reliability, truth, ability, or strength of someone or something.
Quick Intervening
The act of promptly addressing issues or crises to mitigate harm or prevent the worsening of a situation, often crucial in emergency or therapy situations.
Terminating
The process of ending a professional relationship or intervention in a thoughtful and structured manner.
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