The following information is for X Company's two products, A and B: Product B $92,000 51,520 $40,480 Revenue Total variable costs Total contribution margin Total fixed costs Avoidable Unavoidable Profit Product A $92,000 46,920 $45,080 33,984 23,616 $-12,520 14,000 14,000 $12,480 7. If X Company drops Product A because it shows a loss, what will be the effect on firm profits? 8. Assume that if X Company drops Product A, it can use the vacant space to increase sales of Product B by $37,200, but $3,000 of additional fixed costs will be incurred. This use of the vacant space will result in an increase in X Company's profits of?

The following information is for X Company's two products, A and B: Product B $92,000 51,520 $40,480 Revenue Total variable costs Total contribution margin Total fixed costs Avoidable Unavoidable Profit Product A $92,000 46,920 $45,080 33,984 23,616 $-12,520 14,000 14,000 $12,480 7. If X Company drops Product A because it shows a loss, what will be the effect on firm profits? 8. Assume that if X Company drops Product A, it can use the vacant space to increase sales of Product B by $37,200, but $3,000 of additional fixed costs will be incurred. This use of the vacant space will result in an increase in X Company's profits of?

Financial & Managerial Accounting

14th Edition

ISBN:9781337119207

Author:Carl Warren, James M. Reeve, Jonathan Duchac

Publisher:Carl Warren, James M. Reeve, Jonathan Duchac

Chapter20: Variable Costing For Management Analysis

Section: Chapter Questions

Problem 20.10EX

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