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The following information is for X Company's two products - A and B: Product A Product B Revenue $86,000 $93,000 Variable Costs 51,600 53,010 Fixed
The following information is for X Company's two products - A and B:
Product A | Product B | |
Revenue | $86,000 | $93,000 |
Variable Costs | 51,600 | 53,010 |
Fixed costs | $51,060 | $31,970 |
Profit | $-16,660 | $8,020 |
$5,617 of Product A's fixed costs are directly related to Product A; $6,394 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: $-9,199 | B: $-12,235 | C: $-16,272 | D: $-21,642 | E: $-28,783 | F: $-38,282 |
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