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Gonsalvez Company has three product A, B and C. The following information is available: A B Sales $60 000 $38 000 $26 000 Variable costs
Gonsalvez Company has three product A, B and C. The following information is available: A B Sales $60 000 $38 000 $26 000 Variable costs 36 000 18 000 12 000 Contribution margin 24 000 20 000 14000 Fixed expenses 12 000 15 000 16 000 Profit (loss) $12 000 $5 000 $(2 000) Gonsalvez Company is thinking of dropping product line C because it is reporting an operating loss. Assuming fixed costs are avoidable, if Gomsalvez Company drops product line C and does not replace it, what effect will this have on profit? What will be the overall profit of the organisation Show Calculations and provide your justification
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