Question
XYZ Corp produces two products, A and B. The following data is available for the month of November 2024: Item Product A Product B Sales
XYZ Corp produces two products, A and B. The following data is available for the month of November 2024:
Item | Product A | Product B |
Sales revenue | 100,000 | 120,000 |
Variable costs | 60,000 | 80,000 |
Fixed costs | 20,000 | 25,000 |
Allocated fixed costs | 10,000 | 15,000 |
Required: a. Calculate the contribution margin for each product. b. Determine the segment margin for each product. c. Evaluate the profitability of each product and provide a recommendation on whether either product should be discontinued. d. Discuss the importance of segment margin analysis in managerial decision-making.
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Introduction to Management Science
Authors: Bernard W. Taylor
11th Edition
132751917, 978-0132751919
