Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

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!!

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Economics Private And Public Choice

Authors: James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson

17th Edition

0357133994, 9780357133996

More Books

Students also viewed these Accounting questions

Question

What is management fraud?

Answered: 1 week ago

Question

=+a. Does it flow? (Can anyone read it out loud without stumbling?)

Answered: 1 week ago

Question

=+e. Does it use simple language, not technical jargon?

Answered: 1 week ago