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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 = .42 (R) -
The following are the budgeted profit functions for X Company's two products, A and B, for next year: Product A: P = .42 (R) - $30,980 Product B: P = .54 (R) - $58,270 where R is revenue. Budgeted revenue for the two products are $94,000 and $87,000, respectively. Unavoidable fixed costs for the two products are $12,082 and $25,639, 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 $37,900, but that will require $2,800 of additional fixed costs. If X Company drops B and increases revenue from A, firm profits will change by
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