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The following are the budgeted profit functions for X Company's two products, A and B, for next year: Product A: P = .44 (R) -
The following are the budgeted profit functions for X Company's two products, A and B, for next year: Product A: P = .44 (R) - $29,220 Product B: P = .50 (R) - $57,890 where R is revenue. Budgeted revenue for the two products are $91,000 and $94,000, respectively. Avoidable fixed costs for the two products are $18,701 and $32,418, respectively. The company is considering dropping Product B because it appears to be losing money. If it does, the resulting freed-up resources can be used to increase revenue from sales of Product A by $35,200, but that will require $2,000 of additional fixed costs. If X Company drops B and increases revenue from A, firm profits will change by
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