Question

8 pt The following income statement is for X Company and its only two products - A and B: Total Product A Product B $183,490 100,832 $82,658 $89,560 51,049 $38,511 $93,930 49,783 $44,147 Sales Variable Costs Contribution margin Fixed costs: Avoidable 61,820 31,330 $-10,492 23,610 6,080 $8,821 38,210 Unavoidable 25,250 $-19,313 ecause Product B is showing a loss, X Company is considering dropping it and saving its avoidable fixed costs. If it roduct B, X Company's new profits will be BO S-10,258 CO $-12,002 DO S-14,042 EO S-16,429 FO S-19,222

Answer 1

Correct answer----------(E) $16,429

Working

	Product A	Product B		Total
Sales revenue	$     89,560.00			$      89,560.00
Variable costs	$     51,049.00			$      51,049.00
Contribution margin	$     38,511.00	$                   -		$      38,511.00
Less: Fixed cost				$                     -
Avoidable	$     23,610.00			$      23,610.00
Unavoidable	$       6,080.00	$    25,250.00		$      31,330.00
Operating profit (Loss)	$       8,821.00	$ (25,250.00)		$   (16,429.00)