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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 0.40 0.43 Fixed costs $40,036
The following infomation is for three of X Company's products:
Product A | Product B | Product C | |
Contribution margin rate | 0.36 | 0.40 | 0.43 |
Fixed costs | $40,036 | $30,940 | $31,854 |
Profit | $-3,640 | $13,260 | $7,964 |
Sales of Product A were $101,100, but X Company is still considering dropping it because of its reported loss. If it does, $20,018 of fixed costs can be avoided, and it can use use the freed-up resources to increase sales of Product C by $40,000. If X Company does drop Product A and increases sales of Product C, X Company's profits will change by
A: $618 | B: $822 | C: $1,093 | D: $1,454 | E: $1,933 | F: $2,571 |
Tries 0/99 |
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