A company has two different products that are sold in different markets.Financial data are as follows:
$$\begin{array} { | l | l | l | l | }
\hline & \text { Product A } & \text { Product B } & \text { Total } \
\hline \text { Revenue } & \$ 15,000 & \$ 9300 & \$ 24,300 \
\hline \text { Variable cost } & ( 7000 ) & ( 9800 ) & ( 16,800 ) \
\hline \text { Fixed cost (allocated) } & \$ 2000 ) & \$ 2100 ) & ( 4100 ) \
\hline \text { Operating income } & \$ 6000 & ( \$ 2600 ) & \$ 3400 \
\hline
\end{array}$$
Assume that fixed costs of $2000 could be eliminated if product B was dropped.Assume furthermore that dropping one product would not impact sales of the other.If Product B is dropped,what would be the impact on total operating profit of the company?

Question

A company has two different products that are sold in different markets.Financial data are as follows:
$$\begin{array} { | l | l | l | l | } 
\hline & \text { Product A } & \text { Product B } & \text { Total } \
\hline \text { Revenue } & \$ 15,000 & \$ 9300 & \$ 24,300 \
\hline \text { Variable cost } & ( 7000 ) & ( 9800 ) & ( 16,800 ) \
\hline \text { Fixed cost (allocated) } & \$ 2000 ) & \$ 2100 ) & ( 4100 ) \
\hline \text { Operating income } & \$ 6000 & ( \$ 2600 ) & \$ 3400 \
\hline
\end{array}$$
Assume that fixed costs of $2000 could be eliminated if product B was dropped.Assume furthermore that dropping one product would not impact sales of the other.If Product B is dropped,what would be the impact on total operating profit of the company?

Quizplus · Accepted Answer

The Answer of A company has two different products that are sold in different markets.Financial data are as follows:
$$\begin{array} { | l | l | l | l | } 
\hline & \text { Product A } & \text { Product B } & \text { Total } \
\hline \text { Revenue } & \$ 15,000 & \$ 9300 & \$ 24,300 \
\hline \text { Variable cost } & ( 7000 ) & ( 9800 ) & ( 16,800 ) \
\hline \text { Fixed cost (allocated) } & \$ 2000 ) & \$ 2100 ) & ( 4100 ) \
\hline \text { Operating income } & \$ 6000 & ( \$ 2600 ) & \$ 3400 \
\hline
\end{array}$$
Assume that fixed costs of $2000 could be eliminated if product B was dropped.Assume furthermore that dropping one product would not impact sales of the other.If Product B is dropped,what would be the impact on total operating profit of the company?

A Company Has Two Different Products That Are Sold in Different