Question
The following information is for X Company's two products - A and B: Product A Product B Sales $94,000 $89,000 Total contribution margin 39,480 35,600
The following information is for X Company's two products - A and B:
| Product A | Product B | |
| Sales | $94,000 | $89,000 |
| Total contribution margin | 39,480 | 35,600 |
| Fixed costs: | ||
| Avoidable | 20,000 | 29,000 |
| Unavoidable | 5,000 | 26,000 |
| Profit | $14,480 | $-19,400 |
The company is considering dropping Product B because of the $19,400 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
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Peace Love Auditing Journal
Authors: Epic Love Books
1st Edition
1697161693, 978-1697161694
