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agereabera5Lv1
8 Nov 2023
EX 2-5: LOWA PRODUCTS COMPANY
EX 2-5: LOWA PRODUCTS COMPANY
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Related questions
The following information is for X Company's two products, A and B, last year:
| Product A | Product B | ||
| Sales | $89,390 | $86,080 | |
| Total variable costs | 52,740 | 50,787 | |
| Total fixed costs | 30,780 | 59,400 | |
| Profit | $5,870 | $-24,107 | |
Because of the reported loss for Product B, X Company is considering dropping it. Further analysis reveals that $5,780 of Product A's fixed costs and $27,940 of Product B's fixed costs are common costs that the company allocates to the two products.
7. If X Company drops Product B, company profits will change by
8. Assume that sales of Product A can be increased by $15,210 if Product B is dropped. What will be the effect of this increase on company profits?
