L Corporation produces and sells 15,100 units of Product X each month. The selling price of Product X is $21 per unit, and variable expenses are $15 per unit. A study has been made concerning whether Product X should be discontinued. The study shows that $72,000 of the $101,000 in monthly fixed expenses charged to Product X would not be avoidable even if the product was discontinued. If Product X is discontinued, the annual financial advantage (disadvantage) for the company of eliminating this product should be: Multiple Choice $10,400 ($61,600) ($39,400) $39,400

If Product X is discontinued, the company’s overall net operating income would: increase by $61,600

Explanation:

                                          Not drop        Drop       Difference

Sales                                   317,100                           317,100

(15100*21)

Less: Variable expenses   226,500                         226,500

(15,100 * 15)

Contribution margin            90,600                          90,600

Less: fixed expenses          101,000       72,000      29,000

Net operating income      -$10,400                         $61600

Conclusion: If Product X is discontinued, the company’s overall net operating income would: increase by $61,600

answer: b) the us is the leading importer but not the leading exporter.

extra info:

the u.s is the largest importer but it is not the largest exporter as china sits on the top of the table when it comes to leading exporters.

but u.s is not far from first,

they rank in 2nd globally as the worlds largest exporter.

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