Question
The following information is for X Company's two products - A and B: Product A Product B Revenue $86,000 $91,000 Variable Costs 51,600 50,960 Fixed
The following information is for X Company's two products - A and B:
| Product A | Product B | |
| Revenue | $86,000 | $91,000 |
| Variable Costs | 51,600 | 50,960 |
| Fixed costs | $51,570 | $28,750 |
| Profit | $-17,170 | $11,290 |
$6,704 of Product A's fixed costs are directly related to Product A; $4,600 of Product B's fixed costs are directly related to Product B. All other fixed costs are allocated to the individual products. X Company is considering droping Product A because of its reported loss
If it drops Product A, what will be the effect on firm profits?
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Financial Accounting Information For Decisions
Authors: John J Wild
3rd Edition
0072974729, 978-0072974720
