Question
Star Lord expects the following results, without considering any of the changes described below: Product A Product B Total Sales P 100,000 P 300,000 P
Star Lord expects the following results, without considering any of the changes described below:
Product A
Product B
Total
Sales
P 100,000
P 300,000
P 400,000
Variable costs
40,000
100,000
140,000
Contribution margin
P 60,000
P 200,000
P 260,000
Fixed costs - avoidable
(20,000)
(30,000)
(50,000)
Fixed costs - unavoidable*
(50,000)
(100,000)
(150,000)
Profit (loss)
(P 10,000)
P 70,000
P 60,000
* based on unit sales of 100 A and 200 B.
If product A were dropped and unit sales of product B increased by 60%, what would the company's income be?
Group of answer choices
P 20,000
P 140,000
P 120,000
P 200,000
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