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The following Income Statement is for X Company and its only two products - A and B: Total Product A Product B Sales $181,800 $92,700
The following Income Statement is for X Company and its only two products - A and B:
Total | Product A | Product B | |
Sales | $181,800 | $92,700 | $89,100 |
Variable Costs | 101,736 | 50,058 | 51,678 |
Contribution margin | $80,064 | $42,642 | $37,422 |
Fixed costs: | |||
Avoidable | 43,330 | 21,520 | 21,810 |
Unavoidable | 34,370 | 27,190 | 7,180 |
Profit | $2,364 | $-6,068 | $8,432 |
Because Product A is showing a loss, X Company is considering dropping it, and in its place, increase sales of Product B by $18,230.
If it drops Product A and increases sales of Product B, X Company's profits will increase by
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