The annual financial advantage (disadvantage) for the company from discontinuing the production and sale of Doombugs would be:

A) ($30,000)
B) $10,000
C) ($22,000)
D) $18,000

Question

The annual financial advantage (disadvantage)for the company from discontinuing the production and sale of Doombugs would be: A)($30,000) B)$10,000 C)($22,000) D)$18,000

Vivette Watson · Accepted Answer

Final Answer : C, Explanation :  The total annual cost of production and sales of the Doombugs is $50,000. The revenue generated from sales is $28,000 per year. Therefore, the annual financial disadvantage from producing and selling Doombugs is $22,000 ($50,000 - $28,000).  If the product is discontinued, the company will be giving up the annual profit of $22,000 from the toy.

The annual financial advantage (disadvantage) for the company from discontinuing the production and sale of Doombugs would be:

A) ($30,000)
B) $10,000
C) ($22,000)
D) $18,000

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Learning Objectives

Learning Objectives

Related questions

The annual financial advantage (disadvantage) for the company from discontinuing the production and sale of Doombugs would be:A) ($30,000) B) $10,000C) ($22,000) D) $18,000

Definitions

Learning Objectives

Learning Objectives

Related questions

The annual financial advantage (disadvantage) for the company from discontinuing the production and sale of Doombugs would be:

A) ($30,000)
B) $10,000
C) ($22,000)
D) $18,000