The Management of Bercegeay Corporation Is Considering Dropping Product Y25C

question 43

Essay

The management of Bercegeay Corporation is considering dropping product Y25C.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 $117,000 of the fixed manufacturing expenses and $78,000 of the fixed selling and administrative expenses are avoidable if product Y25C is discontinued.
Required:
a.What is the net operating income earned by product Y25C according to the company's accounting system? Show your work!
b.What would be the effect on the company's overall net operating income of dropping product Y25C? Should the product be dropped? Show your work!

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Definitions:

Voluntary Intoxication

A legal defense claiming that the defendant was under the influence of drugs or alcohol by their own choice at the time of the alleged crime.

Private Wrongs

Actions or failures to act that violate the rights of individuals or specific groups, typically resulting in civil legal actions.

Eighth Amendment

Part of the United States Constitution, prohibiting the federal government from imposing excessive bail, excessive fines, or cruel and unusual punishments.

Bill Of Rights

The first ten amendments to the United States Constitution, guaranteeing fundamental rights and freedoms to American citizens.