The Management of Leinberger Corporation Is Considering Dropping Product S48J

question 40

Essay

The management of Leinberger Corporation is considering dropping product S48J.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 $28,000 of the fixed manufacturing expenses and $21,000 of the fixed selling and administrative expenses are avoidable if product S48J is discontinued.
Required:
What would be the effect on the company's overall net operating income if product S48J were dropped? Should the product be dropped? Show your work!

---

Definitions:

Prosocial Behaviors

Actions intended to benefit others, including behaviors like helping, sharing, and comforting.

Nurturant-responsible

A behavioral trait characterized by caring and responsibility towards others, often seen in parental or caregiver roles.

Gusii Children

Refers to children from the Gusii community, an ethnic group in Kenya, often studied in cross-cultural research on developmental and social processes.

Allocaregivers

are individuals, aside from the parents, who provide care and nurturing to children, playing a significant role in the child’s development.