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The following infomation is for three of X Company's products: Product A Product B Product C Contribution margin rate 0.35 0.39 0.43 Fixed costs $27,944
The following infomation is for three of X Company's products:
Product A | Product B | Product C | |
Contribution margin rate | 0.35 | 0.39 | 0.43 |
Fixed costs | $27,944 | $50,193 | $23,478 |
Profit | $6,986 | $-4,563 | $10,062 |
Sales of Product B were $117,000, but X Company is still considering dropping it because of its reported loss. If it does, $25,096 of the fixed costs associated with it can be avoided, and sales of Product C can be increased by $44,600.
If X Company does drop Product B and increases sales of Product C, X Company's profits will change by
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