Asked by Caylee Pritchett on Jul 27, 2024
Verified
What would be the financial advantage (disadvantage) from dropping product V86O?
A) ($35,000)
B) ($5,000)
C) $35,000
D) $5,000
Financial Advantage
This term refers to the benefit gained in financial terms, often measured in terms of profit or cost savings.
Dropping Product
The decision to stop manufacturing, selling, or supporting a product, often due to low sales or profitability.
- Appraise the financial consequences of ending a product's presence in the market.
Verified Answer
XA
Xandra Alexa Barra
Jul 28, 2024
Final Answer :
A
Explanation :
The parentheses around ($35,000) indicate a negative value, meaning dropping product V86O would result in a financial disadvantage of $35,000. Therefore, the best choice is A.
Explanation :
The company would forego the profit of $35,000 if this product were dropped.
Reference: CH11-Ref8
Balser Corporation manufactures and sells a number of products, including a product called JYMP.Results for last year for the manufacture and sale of JYMPs are as follows: Balser is trying to decide whether to discontinue the manufacture and sale of JYMPs.All expenses other than fixed manufacturing overhead are avoidable if the product is dropped.None of the fixed manufacturing overhead is avoidable.
Reference: CH11-Ref8
Balser Corporation manufactures and sells a number of products, including a product called JYMP.Results for last year for the manufacture and sale of JYMPs are as follows: Balser is trying to decide whether to discontinue the manufacture and sale of JYMPs.All expenses other than fixed manufacturing overhead are avoidable if the product is dropped.None of the fixed manufacturing overhead is avoidable.
Learning Objectives
- Appraise the financial consequences of ending a product's presence in the market.
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