Suire Corporation is considering dropping product D$14$E$.$ Data from the company's accounting system appear below:

Sales $ $850,000$

Variable expenses $ $426,000$

Fixed manufacturing expenses $ $268,000$

Fixed selling and administrative expenses $ $216,000$

All fixed expenses of the company are fully allocated to products in the company's accounting system. Further investigation has revealed that $$205,000$ of the fixed manufacturing expenses and $$120,000$ of the fixed selling and administrative expenses are avoidable if product D$14$E is discontinued.

Required:

According to the company's accounting system, what is the net operating income earned by product D$14$E$?$

Note: Net losses should be indicated by a minus sign.

What would be the financial advantage $($disadvantage$)$ of dropping product D$14$E$?$ Should the product be dropped?

Pt $2.$

Assume that Product Manager Yadier Chaver asks for your recommendation regarding dropping Product D$14$E$.$ Based upon your analysis above, write a brief memo that outlines your recommendation to Mr$.$ Chaver. Explain why you think they should or should not drop Product D$14$E$.$ Be sure to specifically address the potential impact on each of the stakeholders.