Question
The following information is for X Company's two products, A and B, last year: Product A Product B Sales $93,000 $94,730 Total variable costs 55,800
The following information is for X Company's two products, A and B, last year: Product A Product B Sales $93,000 $94,730 Total variable costs 55,800 53,049 Total fixed costs 52,510 30,410 Profit $-15,310 $11,271 Because of the reported loss for Product A, X Company is considering dropping it. Further analysis reveals that $28,750 of Product A's fixed costs and $6,750 of Product B's fixed costs are common costs that the company allocates to the two products. 7. If X Company drops Product A, company profits will change by Submit Answer Tries 0/5 8. Assume that sales of Product B can be increased by $17,890 if Product A is dropped. What will be the effect of this increase on company profits?
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