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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 0.43 Fixed costs $27,328
The following infomation is for three of X Company's products:
Product A | Product B | Product C | |
Contribution margin rate | 0.35 | 0.39 | 0.43 |
Fixed costs | $27,328 | $31,040 | $38,739 |
Profit | $6,832 | $13,303 | $-3,522 |
Sales of Product C were $81,900, but X Company is still considering dropping it because of its reported loss. If it does, $19,369 of the fixed costs associated with it can be avoided, and sales of Product B can be increased by $44,000.
If X Company does drop Product C and increases sales of Product B, X Company's profits will change by
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