Nutall Corporation Is Considering Dropping Product N28X

question 23

Essay

Nutall Corporation is considering dropping product N28X.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 $199,000 of the fixed manufacturing expenses and $114,000 of the fixed selling and administrative expenses are avoidable if product N28X is discontinued.
Required:
a.According to the company's accounting system,what is the net operating income earned by product N28X? Show your work!
b.What would be the effect on the company's overall net operating income of dropping product N28X? Should the product be dropped? Show your work!

Understand how market equilibrium affects efficiency and total surplus.

Recognize the concept of market failure and externalities.

Understand the impact of government interventions on market efficiency and surplus.

Understand the definitions and distinctions between anoxia and hypoxia.

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Definitions:

Refrigerator

An appliance used for keeping food and drinks cold.

Deficiency

A lack or shortage of a necessary element or quality.

Chattel Mortgage

A loan arrangement in which an item of movable personal property acts as security for a loan, with the lender holding an interest in the property until the loan is repaid.

Bill Of Sale

A legal document that transfers ownership of personal property from the seller to the buyer.