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The following infomation is for three of X Company's products: Product A Product B Product C Contribution margin rate 0.37 0.40 0.43 Fixed costs $30,636
The following infomation is for three of X Company's products:
If X Company does drop Product C and increases sales of Product A, X Company's profits will change by
Product A | Product B | Product C | |
Contribution margin rate | 0.37 | 0.40 | 0.43 |
Fixed costs | $30,636 | $30,968 | $41,056 |
Profit | $7,659 | $13,272 | $-3,732 |
Sales of Product C were $86,800, but X Company is still considering dropping it because of its reported loss. If it does, $20,528 of the fixed costs associated with it can be avoided, and sales of Product A can be increased by $42,300.
If X Company does drop Product C and increases sales of Product A, X Company's profits will change by
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