Question
The following infomation is for three of X Company's products: Product A, Product B, Product C Contribution margin rate 0.35, 0.40, 0.44 Fixed costs $24,990,
The following infomation is for three of X Company's products:
Product A, Product B, Product C
Contribution margin rate 0.35, 0.40, 0.44
Fixed costs $24,990, $31,724, $44,722
Profit $10,710, $13,596, $-4,066
Sales of Product C were $92,400, but X Company is still considering dropping it because of its reported loss. If it does, $22,361 of fixed costs can be avoided, and it can use use the freed-up resources to increase sales of Product B by $41,100. If X Company does drop Product C and increases sales of Product B, X Company's profits will change by
A: $-1,453 | B: $-1,642 | C: $-1,855 | D: $-2,096 | E: $-2,369 | F: $-2,677 |
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