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The following information is for X Company's two products - A and B: Product A Product B Revenue $95,000 $92,000 Variable Costs 50,350 53,360 Fixed
The following information is for X Company's two products - A and B:
Product A | Product B | |
Revenue | $95,000 | $92,000 |
Variable Costs | 50,350 | 53,360 |
Fixed costs | $57,100 | $32,580 |
Profit | $-12,450 | $6,060 |
$11,420 of Product A's fixed costs are directly related to Product A; $3,910 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: $-26,024 | B: $-29,407 | C: $-33,230 | D: $-37,550 | E: $-42,431 | F: $-47,947 |
Really struggling on this question, if anyone could help I would greatly appreciate it! Thank you!!
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