Kabanuck Corporation management is considering abandoning the V41B product. The data from the company's accounting system appears as follows: 

Sales $918,000 

Variable expenses $403,000 

Fixed manufacturing expenses $515,000

 Fixed selling and administrative expenses $332,000 

All fixed expenses of the company are fully allocated to products in the system company accountant. 

Further investigation has revealed that $205,000 of fixed manufacturing costs and $116,000 of fixed selling and administrative costs can be avoided if the V41B product is discontinued. 

What would be the effect on the company's overall net operating income if the V41B product were dropped?

Answer rating: 100% (QA)

To determine the effect on the companys overall net operating income if the V41B product is dro... View the full answer