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Please help. What would be the effect on income if productA were dropped? eTextbook and Media Save for Later Attempts: 1 of 3 used (C)

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What would be the effect on income if productA were dropped? eTextbook and Media Save for Later Attempts: 1 of 3 used (C) x Your answer is inoorrect. Management is considering making a new product using product A's equipment. If the new product's selling price per unit were $11, its variable costs were $6, and its advertising costs were the same as for productA, how many units of the new product would the company have to sell to make the switch from product A to the new product worthwhile? Units 1120(1) eTextbook and Media S ENE for Later Attempts: 1 of 3 used Ivanhoe Tovs' management is considering eliminating product A, which has been showing a loss for several years. The companfs annuaF income statement, is as follows: A B C Total Sales $2,219,000 $1,408,000 $1,812,800 $5,439,800 Variable expenses 1,655,000 601,500 1,092,600 3,349,100 Contribution margin $564,000 $806,500 $720,200 $2,090,700 Advertising expense $505,000 $426,000 $521,000 $1,452,000 Depreciation expense 17,800 10,300 20,200 48,300 Corporate expenses 93,800 81,100 106,800 281,700 Total xed expenses $616,600 $5 17,400 $648,000 $1,782,000 Operating income $62,600} $289,100 $72,200 $308,700 Advertising expense Specic to each product Depreciation expense Specic to each product; no other use available, no resale value. Corporate expenses Allocated based on number of employees

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