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The following information is for X Company's two products - A and B: Product A Product B Revenue $95,000 $93,000 Variable Costs 53,200 55,800 Fixed
The following information is for X Company's two products - A and B:
Product A | Product B | |
Revenue | $95,000 | $93,000 |
Variable Costs | 53,200 | 55,800 |
Fixed costs | $50,760 | $28,600 |
Profit | $-8,960 | $8,600 |
$10,152 of Product A's fixed costs are directly related to Product A; $2,860 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 dropping Product A because of its reported loss
If it drops Product A, what will be the effect on firm profits?
A: $-20,255 | B: $-25,318 | C: $-31,648 | D: $-39,560 | E: $-49,450 | F: $-61,812 |
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