Question
The following income statement is for X Company's two products, A and B: Product A Product B Revenue $93,000 $93,000 Total variable costs 47,430 55,800
The following income statement is for X Company's two products, A and B:
| Product A | Product B | |||
| Revenue | $93,000 | $93,000 | ||
| Total variable costs | 47,430 | 55,800 | ||
| Total contribution margin | $45,570 | $37,200 | ||
| Total fixed costs | ||||
| Avoidable | 35,046 | 16,192 | ||
| Unavoidable | 24,354 | 14,358 | ||
| Profit | $-13,830 | $6,650 | ||
If X Company drops Product A because it shows a loss and is able to use the vacant space to increase sales of Product B by $26,700, with $4,200 of additional fixed costs, what will be the effect on firm profits?
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Cost Accounting With Integrated Data Analytics
Authors: Karen Congo Farmer, Amy Fredin
1st Edition
1119731860, 9781119731863
