The management of Woznick Corporation has been concerned for some time with the financial performance of...

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The management of Woznick Corporation has been concerned for some time with the financial performance of its product V860 and has considered discontinuing it on several occasions. Data from the company's accounting system appear below: Sales Variable expenses.. Fixed manufacturing expenses.. Fixed selling and administrative expenses...... $150,000 $72,000 $50,000 $33,000 In the company's accounting system all fixed expenses of the company are fully allocated to products. Further investigation has revealed that $30,000 of the fixed manufacturing expenses and $13,000 of the fixed selling and administrative expenses are avoidable if product V860 is discontinued. A. According to the company's accounting system, what is the net operating income earned by product V860? B. What would be the effect on the company's overall net operating income if product V860 were dropped? The management of Woznick Corporation has been concerned for some time with the financial performance of its product V860 and has considered discontinuing it on several occasions. Data from the company's accounting system appear below: Sales Variable expenses.. Fixed manufacturing expenses.. Fixed selling and administrative expenses...... $150,000 $72,000 $50,000 $33,000 In the company's accounting system all fixed expenses of the company are fully allocated to products. Further investigation has revealed that $30,000 of the fixed manufacturing expenses and $13,000 of the fixed selling and administrative expenses are avoidable if product V860 is discontinued. A. According to the company's accounting system, what is the net operating income earned by product V860? B. What would be the effect on the company's overall net operating income if product V860 were dropped?

Answer rating: 100% (QA)

A According to the companys accounting system the net operating income earned by product V860 is Sal... View the full answer