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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 $25,376
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 | $25,376 | $36,192 | $44,698 |
Profit | $10,876 | $9,048 | $-4,064 |
Sales of Product C were $90,300, but X Company is still considering dropping it because of its reported loss. If it does, $22,349 of the fixed costs associated with it can be avoided, and sales of Product A can be increased by $42,000.
If X Company does drop Product C and increases sales of Product A, X Company's profits will change by
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