Asked by Bruno Vieira on Jul 14, 2024
Verified
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
Financial Advantage
A benefit or gain in financial terms, often providing an edge over competitors or a favorable financial position.
Production
The process of creating, manufacturing, or crafting goods and services to be sold or used.
- Analyze the financial results of ending a product's production.
Verified Answer
VW
Vivette WatsonJul 17, 2024
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).
Explanation :
If the product is discontinued, the company will be giving up the annual profit of $22,000 from the toy.
Learning Objectives
- Analyze the financial results of ending a product's production.
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