Question: A company is considering dropping a product line. Data from the company's budget for the upcoming year for this product line appear below: Further investigation
A company is considering dropping a product line. Data from the company's budget for the upcoming year for this product line appear below: Further investigation has revealed that 78% of the fixed manufacturing costs and 20% of the fixed selling and administrative expenses are avoidable if the product were discontinued. What would be the total annual financial impact from eliminating this product? (Make sure to calculate the total impact, not the per-unit amount, Use a negative number to indicate a reduction in cash flows.)
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