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Thompson Company manufactures two products. Both products have the same sales price, and the volume of sales is equivalent. However, due to the difference in
Thompson Company manufactures two products. Both products have the same sales price, and the volume of sales is equivalent. However, due to the difference in production processes, Product A has higher variable costs and Product B has higher fixed costs. Management is considering dropping Product B because that product line has an operating loss. (Click the icon to view the income statement.) 9. If fixed costs cannot be avoided, should Thompson drop Product B? Why or why not? 10. If 50% of Product B's fixed costs are avoidable, should Thompson drop Product B? Why or why not? Data table
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