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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 0.45 Fixed costs $23,765
The following infomation is for three of X Company's products:
Product A | Product B | Product C | |
Contribution margin rate | 0.35 | 0.39 | 0.45 |
Fixed costs | $23,765 | $50,107 | $32,184 |
Profit | $10,185 | $-4,555 | $8,046 |
Sales of Product B were $116,800, but X Company is still considering dropping it because of its reported loss. If it does, $25,054 of fixed costs can be avoided, and it can use use the freed-up resources to increase sales of Product C by $41,800. If X Company does drop Product B and increases sales of Product C, X Company's profits will change by
A: $-382 | B: $-554 | C: $-803 | D: $-1,164 | E: $-1,688 | F: $-2,448 |
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