Merchandise inventory at the end of the year was understated. which of the following statements correctly states the effect of the error? a. net income is understatedb. net income is overstatedc. cost of merchandise sold is understatedd. merchandise inventory reported on the balance sheet is overstated

Lusk corporation produces and sells 14,300 units of product x each month. the selling price of product x is $25 per unit, and variable expenses are $19 per unit. a study has been made concerning whether product x should be discontinued. the study shows that $72,000 of the $102,000 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: