7. TXYZ Co., Ltd. produces and sells 3 types of products: X, Y and Z. The management of the company is deciding to cancel the production and sale of Y because of the loss as follows: (20 POINTS) X Y Z Total Sales 125,000 75,000 100,000 300,000 Variable Cost 67,500 50,500 55,000 173,000 57,500 24,500 45,000 127,000 Contribution Margin (CM) Fixed Cost - Direct 14,000 14,750 11,250 40,000 - Allocate 25.000 15.000 20,000 60,000 Total 39,000 29,750 31,250 100.000 Operating Profit (Loss) 18,500 (5.250) 13,750 27.000 More information 1. Direct fixed costs that are avoidable costs since it only occurs when the product is manufactured and sold in product Y Allocate fixed costs are the fixed costs together. From operations, allocation will be allocated based on sales received