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The following infomation is for three of X Company's products: Product A Product B Product C Contribution margin rate 0.36 0.39 0.44 Fixed costs $38,689
The following infomation is for three of X Company's products:
Product A | Product B | Product C | |
Contribution margin rate | 0.36 | 0.39 | 0.44 |
Fixed costs | $38,689 | $31,067 | $33,088 |
Profit | $-3,517 | $13,315 | $8,272 |
Sales of Product A were $97,700, but X Company is still considering dropping it because of its reported loss. If it does, $19,345 of fixed costs can be avoided, and it can use use the freed-up resources to increase sales of Product C by $42,400. If X Company does drop Product A and increases sales of Product C, X Company's profits will change by
4205 | Incorrect. | Tries 1/3 | Previous Tries |
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