The Management of Kabanuck Corporation Is Considering Dropping Product V41B

question 82

Multiple Choice

The management of Kabanuck Corporation is considering dropping product V41B.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 $184, 000 of the fixed manufacturing expenses and $200, 000 of the fixed selling and administrative expenses are avoidable if product V41B is discontinued. According to the company's accounting system, what is the net operating income earned by product V41B? Include all costs in this calculation-whether relevant or not.

• A)$71, 000
• B)$516, 000
• C)$(516, 000)
• D)$(71, 000)

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Definitions:

Federal Income Taxes

Taxes imposed by the U.S. federal government on taxable incomes of individuals, corporations, and other entities.

State Income Taxes

Taxes levied by individual states on the income of individuals and organizations within their jurisdiction.

Taxation

The system through which government collects money from individuals and businesses to fund public services.

Policy Decisions

Decisions taken by an organization or government based on guiding principles or regulations intended to direct actions and outcomes.