Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

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

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Intermediate Accounting Volume 2

Authors: Hanlon, Hodder, Nelson, Roulstone, Dragoo

2nd Edition

1618533134, 9781618533357

More Books

Students also viewed these Accounting questions