(Solved):The following information is for X Company’s two products, A and B: A B Revenue: $92,000 $89,000…

 

Question

The following information is for X Company’s two products, A and B:

A B
Revenue: $92,000 $89,000
Total variable costs: $53,360 $53,400
Total contribution margin: $38,640 $35,600
Total fixed costs: Avoidable: $25,915 $17,253
Unavoidable: $25,915 $14,697
Profit: $-13,190 $3,650

7. If X Company drops Product A because it shows a loss, what will be the effect on firm profits?

8. Assume that if X Company drops Product A, it can use the vacant space to increase sales of Product B by $37,200, but $4,800 of additional

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