A company has two different products that sell to separate markets. Financial data are as follows: Assume that fixed costs are all unavoidable and that dropping one product would not impact sales of the other. Because the contribution margin of Product B is negative, it should be dropped.

Question

A company has two different products that sell to separate markets. Financial data are as follows:  Assume that fixed costs are all unavoidable and that dropping one product would not impact sales of the other. Because the contribution margin of Product B is negative, it should be dropped.

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The Answer of A company has two different products that sell to separate markets. Financial data are as follows:  Assume that fixed costs are all unavoidable and that dropping one product would not impact sales of the other. Because the contribution margin of Product B is negative, it should be dropped.

A Company Has Two Different Products That Sell to Separate