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The following information is for X Company's two products - A and B: Product A Product B Revenue $86,000 $94,000 Variable Costs 49,020 56,400 Fixed
The following information is for X Company's two products - A and B:
Product A | Product B | |
Revenue | $86,000 | $94,000 |
Variable Costs | 49,020 | 56,400 |
Fixed costs | $52,670 | $28,930 |
Profit | $-15,690 | $8,670 |
$5,267 of Product A's fixed costs are directly related to Product A; $3,472 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: $-17,213 | B: $-19,450 | C: $-21,979 | D: $-24,836 | E: $-28,065 | F: $-31,713 |
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