Answered step by step
Verified Expert Solution
Question
1 Approved Answer
The following Income Statement is for X Company and its only two products - A and B: Total Product A Product B Sales $177,540 $90,760
The following Income Statement is for X Company and its only two products - A and B:
Total | Product A | Product B | |
Sales | $177,540 | $90,760 | $86,780 |
Variable Costs | 97,488 | 46,288 | 51,200 |
Contribution margin | $80,052 | $44,472 | $35,580 |
Fixed costs: | |||
Avoidable | 54,560 | 30,650 | 23,910 |
Unavoidable | 34,220 | 27,300 | 6,920 |
Profit | $-8,728 | $-13,478 | $4,750 |
Because Product A is showing a loss, X Company is considering dropping it, and in its place, increase sales of Product B by $16,640.
If it drops Product A and increases sales of Product B, X Company's profits will increase by_____
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started