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Reading Company sells two products Product A and Product B. The company is considering dropping Product B. Reading drops Product B. then ales volume of

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Reading Company sells two products Product A and Product B. The company is considering dropping Product B. Reading drops Product B. then ales volume of Product Als expected to increase by 40% per month. Fruipment rental for Product B ka direct feed cost that can be avoided It Product B is dropped Reading's other fund costs are allocations of common corporate found costs that will be incurred regardless of Reading keeps or drops Product B. The following data are available: Product A Product B Total Sales $10,000 $8,000 $18.000 revenue Direct $2,500 $2.000 $4.500 materials Direct $2,000 $1.200 $3,200 labor Equipment $300 $3,600 $3.900 rental Other foued $1.000 $2.100 $3.100 costs Operating $4.200 159001 $3.300 income What is the financial advantage or disadvantage of dropping Product B? $1.000 advantage 51300 advantage $7.900 disadvantage Proctor that Sharing 56.600 disadvantage (hp 5 6 & 7 00 9 o T U 1 o P

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