A company is considering dropping a product line. Data from the company s budget for the upcoming
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Question:
A company is considering dropping a product line. Data from the companys budget for the upcoming year for this product line appear below:
Sales Revenue: $
Variable costs: $
Fixed manufacturing costs: $
Fixed selling and administrative costs: $
Further investigation has revealed that of the fixed manufacturing costs and of the fixed selling and administrative expenses would remain if the product were discontinued, but the rest of these fixed costs could be avoided.
What would be the total annual financial impact from eliminating this product?
Make sure to calculate the total impact, not the perunit amount. Use a negative number to indicate a reduction in cash flows.
Related Book For
Income Tax Fundamentals 2013
ISBN: 9781285586618
31st Edition
Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill
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