Bonga Corp: company's overall net operating income
Not what you're looking for?
The management of Bonga Corporation is considering dropping product D74F. Data from the company's accounting system appear below:
Sales $760,000
Variable expenses $480,000
Fixed manufacturing expenses $266,000
Fixed selling and administrative expenses $312,000
All fixed expenses of the company are fully allocated to products in the company's accounting system. Further investigation has revealed that $107,000 of the fixed manufacturing expenses and $97,000 of the fixed selling and administrative expenses are avoidable if product D74F is discontinued.
What would be the effect on the company's overall net operating income if product D74F were dropped?
Overall net operating income would increase by $76,000.
Overall net operating income would decrease by $76,000.
Overall net operating income would increase by $298,000.
Overall net operating income would decrease by $298,000.
Purchase this Solution
Education
- BE, Bangalore University, India
- MS, University of Wisconsin-Madison
Recent Feedback
- "Your explanation to the answers were very helpful."
- "What does 1 and 0 means in the repair column?"
- "Went through all of the formulas, excellent work! This really helped me!"
- "try others as well please"
- "Thank you, this helped a lot. I was not sure how to plug in those numbers to a formula. This was a great help. Now I have to figure out how to explain cost of capital is used in net present value analysis, and how cost of capital is used in net present value analysis. This stuff gets confusing."
Purchase this Solution
Free BrainMass Quizzes
Production and cost theory
Understanding production and cost phenomena will permit firms to make wise decisions concerning output volume.
Marketing Research and Forecasting
The following quiz will assess your ability to identify steps in the marketing research process. Understanding this information will provide fundamental knowledge related to marketing research.
Learning Lean
This quiz will help you understand the basic concepts of Lean.
Paradigms and Frameworks of Management Research
This quiz evaluates your understanding of the paradigm-based and epistimological frameworks of research. It is intended for advanced students.
Marketing Management Philosophies Quiz
A test on how well a student understands the basic assumptions of marketers on buyers that will form a basis of their marketing strategies.