7.ZED manufactures and sells two products: X and Y. The profit or loss of the company is formed only by the results of its two products. You are presented with the following data:

In an effort to improve profitability, the company's management is considering eliminating product X. Here is some additional information: - FIF fixed costs are common (allocated) to products X and Y. - Company management expects that 25% of the specific fixed operating costs for each product would be saved if the corresponding product were eliminated. - The unit selling price of products X and Y are $80 and $110, respectively - The company has produced and sold 150,000 units of X and 50,000 units of Y. - The net income of product Y is $1,150,000.

If product X were eliminated, the total income of the firm would be: a)1 150 000 $ b)1 000 000$ c)250 000 $ d)No answer is appropriate

Product Cost of sale in $ : Variable part 9 000 000 Indirect manufacturing costs (allocated) 750 000 Gross margin in $ 2 250 000 Operating expenses in $: Variables 2 100 00 Fixed 300 000 Net income in $ (150 000)