A company has two different products that are sold in different markets.Financial data are as follows:
$$\begin{array} { | l | l | l | l | }
\hline & \text { Product A } & \text { Product B } & \text { Total } \
\hline \text { Revenue } & \$ 18,000 & \$ 9500 & \$ 27,500 \
\hline \text { Variable cost } & ( 9000 ) & ( 9700 ) & ( 18,700 ) \
\hline \text { Fixed cost (allocated) } & \$ 2000 ) & \$ 2000 ) & ( 4000 ) \
\hline \text { Operating profit } & \$ 7000 & ( \$ 2200 ) & \$ 4800 \
\hline
\end{array}$$
Assume that fixed costs are all unavoidable and 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:
$$\begin{array} { | l | l | l | l | } 
\hline & \text { Product A } & \text { Product B } & \text { Total } \
\hline \text { Revenue } & \$ 18,000 & \$ 9500 & \$ 27,500 \
\hline \text { Variable cost } & ( 9000 ) & ( 9700 ) & ( 18,700 ) \
\hline \text { Fixed cost (allocated) } & \$ 2000 ) & \$ 2000 ) & ( 4000 ) \
\hline \text { Operating profit } & \$ 7000 & ( \$ 2200 ) & \$ 4800 \
\hline
\end{array}$$
Assume that fixed costs are all unavoidable and 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:
$$\begin{array} { | l | l | l | l | } 
\hline & \text { Product A } & \text { Product B } & \text { Total } \
\hline \text { Revenue } & \$ 18,000 & \$ 9500 & \$ 27,500 \
\hline \text { Variable cost } & ( 9000 ) & ( 9700 ) & ( 18,700 ) \
\hline \text { Fixed cost (allocated) } & \$ 2000 ) & \$ 2000 ) & ( 4000 ) \
\hline \text { Operating profit } & \$ 7000 & ( \$ 2200 ) & \$ 4800 \
\hline
\end{array}$$
Assume that fixed costs are all unavoidable and 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