Please show work! 8pt The following information is for X Company\'s two products

Question

Please show work!

8pt The following information is for X Company's two products-A and B Product EB $92,000 36,800 Product A Sales Total contribution margin Fixed costs 93,000 7,200 Avoidable Unavoidable 21,000 7,000 $9,200 38,000 29,000 $-30,200 Profit The company is considering dropping Prodnet B beease of the $30,200 os. If X Company drops Product B, it will use the freed-up resources to increase sales of Product A by $17,000. IfX Company drops Product B and increases sales of A, fir proits will change by AO $4,523 BO $6,015 CO $8,000DO $10.640 EO $14151 FO $18.82

Explanation / Answer

contribution margin = contribution /sales product A               = 37200/93000= 0.4 Product B               = 36,800/92000= 0.4 increase in profit of product A (17000*40%)= 6800 contribution lost by dropping B -36,800 Saving in fixed cost (avoidable) 38,000 Change in profit 8000 Answer ) option c $8,000

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