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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 = .41 (R) -
The following are the budgeted profit functions for X Company's two products, A and B, for next year: Product A: P = .41 (R) - $25,860 Product B: P = .53 (R) - $59,970 where R is revenue. Budgeted revenue for the two products are $95,000 and $85,000, respectively. Avoidable fixed costs for the two products are $16,809 and $32,984, 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 by $37,200, 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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