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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 0.45 Fixed costs $24,872
The following infomation is for three of X Company's products:
Product A | Product B | Product C | |
Contribution margin rate | 0.36 | 0.40 | 0.45 |
Fixed costs | $24,872 | $48,576 | $33,228 |
Profit | $10,660 | $-4,416 | $8,307 |
Sales of Product B were $110,400, but X Company is still considering dropping it because of its reported loss. If it does, $24,288 of fixed costs can be avoided, and it can use use the freed-up resources to increase sales of Product C by $40,400. If X Company does drop Product B and increases sales of Product C, X Company's profits will change by
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