(Solved):The management of Heider Corporation is considering dropping product J14V. Data from the…

 

Question

The management of Heider Corporation is considering dropping product J14V. Data from the company’s accounting system appear below:

Sales $940,000
Variable expenses $379,000
Fixed manufacturing expenses $361,000
Fixed selling and administrative expenses $241,000

In the company’s accounting system all fixed expenses of the company are fully allocated to products. Further investigation has revealed that $215,000 of the fixed manufacturing expenses and $176,000 of the fixed selling and administrative expenses are avoidable if product J14V is

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