Your Company is considering discontinuing a product. Its last income statement appears below:

Sales revenue $240,000

Variable production costs $95,000

Fixed production costs $120,000

Variable selling costs $6,000

Fixed selling and administrative costs $55,000

Net income ($36,000)

$35,000 of the fixed manufacturing expenses and $15,000 of the fixed selling and administrative expenses will still need to be paid if the product is discontinued. What would be the effect on the company's overall net operating income if the product were dropped?

Answer rating: 100% (QA)

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