Question
The following information is for X Company's two products - A and B: Product A Product B Sales $88,000 $93,000 Total contribution margin 36,960 37,200
The following information is for X Company's two products - A and B: Product A Product B Sales $88,000 $93,000 Total contribution margin 36,960 37,200 Fixed costs: Avoidable 21,000 44,500 Unavoidable 5,000 28,000 Profit $10,960 $-35,300 The company is considering dropping Product B because of the $35,300 loss. If X Company drops Product B, it can use the freed-up resources to increase sales of Product A by $12,000. If X Company drops Product B and increases sales of A by $12,000, firm profits will change by A: $6,698 B: $7,568 C: $8,552 D: $9,664 E: $10,920 F: $12,340
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