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Eliminate A, Eliminate A, Increase B Increase B Sales 30% and Eliminate A Eliminate B Eliminate C Sales 50% C Sales 20% Sales - Variable
Eliminate A, Eliminate A, Increase B Increase B Sales 30% and Eliminate A Eliminate B Eliminate C Sales 50% C Sales 20% Sales - Variable Costs Contribution Margin Segment Fixed Costs Allocated Corporate Fixed Costs Pre-tax Profit Which provides the greatest profit? To answer this question, Link to one of the following phrases: Eliminate A Eliminate B Eliminate C Eliminate A and Increase B Sales 50% Eliminate A, Increase B Sales 30% and C Sales 20% Do Nothing and Keep all three segmentsProduct A Product B Product C Total Sales $900'000 $875'000 $680'000 $2'455'000 Variable Costs $750'000 $600'000 $390'000 $1'740'000 Contribution Margin $150'000 $275'000 $290'000 $715'000 Segment Fixed Costs $140'000 $130'000 $120'000 $390'000 Allocated Corporate Fixed Costs $80'000 $80'000 $80'000 $240'000 Pre-tax Profit ($70'000) $65'000 $90'000 $85'000
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