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The following information is for X Company's two products - A and B: Product A Product B Revenue $89,000 $95,000 Variable Costs 49,840 56,050 Fixed
The following information is for X Company's two products - A and B:
Product A | Product B | |
Revenue | $89,000 | $95,000 |
Variable Costs | 49,840 | 56,050 |
Fixed costs | $50,010 | $29,240 |
Profit | $-10,850 | $9,710 |
$10,002 of Product A's fixed costs are directly related to Product A; $4,678 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?
A: $-25,804 | B: $-29,158 | C: $-32,949 | D: $-37,232 | E: $-42,072 | F: $-47,541 |
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