Question
Questions 7 and 8 refer to the following problem: The following information is for X Company's two products, A and B: Revenue: A)$92,000 B)$89,000 Total
Questions 7 and 8 refer to the following problem:
The following information is for X Company's two products, A and B:
Revenue: A)$92,000 B)$89,000
Total variable costs: A)$53,360 B)$53,400
Total contribution margin: A)$38,640 B)$35,600
Total fixed costs:
Avoidable: A)$25,915 B)$17,253
Unavoidable: A)$25,915 B)$14,697
Profit: A)$-13,190 B)$3,650
7. If X Company drops Product A because it shows a loss, what will be the effect on firm profits?________________
8. Assume that if X Company drops Product A, it can use the vacant space to increase sales of Product B by $37,200, but $4,800 of additional fixed costs will be incurred. This use of the vacant space will result in an increase in X Company's profits of_______________________
Only ONE try left for both parts. I posted this earlier and the answer was wrong. Please help and give the right answer!!!
Thank you!
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started