Question
The following information is for X Company's two products - A and B: Product A Product B Revenue $92,000 $89,000 Variable Costs 52,440 50,730 Fixed
The following information is for X Company's two products - A and B:
| Product A | Product B | |
| Revenue | $92,000 | $89,000 |
| Variable Costs | 52,440 | 50,730 |
| Fixed costs | $31,850 | $54,720 |
| Profit | $7,710 | $-16,450 |
$4,459 of Product A's fixed costs are directly related to Product A; $6,566 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 B because of its reported loss
If it drops Product B, what will be the effect on firm profits?
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Introduction To Managerial Accounting
Authors: Jeannie Folk, Ray Garrison, Eric Noree
1st Edition
0072468440, 978-0072468441
