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Keller Corporation is considering dropping product S85U. Data from the company's accounting system appear below.


Sales $360,000
Variable Expenses $158,000
Fixed Manufacturing Expenses $119,000
Fixed Selling and Administrative Expenses $94,000

All fixed expenses of the company are fully allocated to products in the company's accounting system. Further investigation has revealed that $55,000 of the fixed manufacturing expenses and $71,000 of the fixed selling and administrative expenses are avoidable if product S85U is discontinued.

Required:

i. According to the company's accounting system, what is the net operating income earned by product S85U?

 

Accounting Basics, Accounting

  • Category:- Accounting Basics
  • Reference No.:- M941728

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