The following income statement is for X Company's two products, A and B: ...
70.2K
Verified Solution
Link Copied!
Question
Accounting
The following income statement is for X Company's two products, A and B:
| Product A | Product B | |||
| Revenue | $93,000 | $85,000 | ||
| Total variable costs | 53,940 | 51,000 | ||
| Total contribution margin | $39,060 | $34,000 | ||
| Total fixed costs | ||||
| Avoidable | 28,286 | 18,266 | ||
| Unavoidable | 22,224 | 12,694 | ||
| Profit | $-11,450 | $3,040 | ||
If X Company drops Product A because it shows a loss and is able to use the vacant space to increase sales of Product B by $26,000, with $5,000 of additional fixed costs, what will be the effect on firm profits?
Get Answers to Unlimited Questions
Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!
Membership Benefits:
- Unlimited Question Access with detailed Answers
- Zin AI - 3 Million Words
- 10 Dall-E 3 Images
- 20 Plot Generations
- Conversation with Dialogue Memory
- No Ads, Ever!
- Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Other questions asked by students
StudyZin's Question Purchase
1 Answer
$0.99
(Save $1 )
One time Pay
- No Ads
- Answer to 1 Question
- Get free Zin AI - 50 Thousand Words per Month
Best
Unlimited
$4.99*
(Save $5 )
Billed Monthly
- No Ads
- Answers to Unlimited Questions
- Get free Zin AI - 3 Million Words per Month
*First month only
Free
$0
- Get this answer for free!
- Sign up now to unlock the answer instantly
You can see the logs in the Dashboard.