finding net operating income accounting 461274

Nutall Corporation is considering dropping product N28X. Data from the company’s accounting system appear below:

Sales $ 830,000

Variable expense $ 416,000

Fixed manufacturing expenses $ 266,000

Fixed selling and administrative expense $ 214,000

All fixed expenses of the company are fully allocated to products in the company’s accounting system. Further investigation has revealed that $204,000 of the fixed manufacturing expenses and $119,000 of the fixed selling and administrative expenses are avoidable if product N28X is discontinued.

Required:

a.

According to the company’s accounting system, what is the net operating income earned by product N28X? (Input the amount as a positive value. Omit the “$” sign in your response.)

$

b-1.

What would be the effect on the company’s overall net operating income of dropping product N28X? (Input the amount as a positive value. Omit the “$” sign in your response.)

Net operating income would be by $ .

b-2.

Should the product be dropped?

Yes or No?