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?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:The following information is for X Company's two products, A and B:
Product A
$92,000
46,920
$45,080
Revenue
Total variable costs
Total contribution margin
Total fixed costs
Avoidable
Unavoidable
Profit
33,984
23,616
$-12,520
Product B
$92,000
51,520
$40,480
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. it can use the vacant space 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?
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