Question: Cut Copy Format S Wrap Text Calibri (Body) 11A A Merge & Center | oblem 7 Your Company makes 3 products: A, B, &C.Your Co
Cut Copy" Format S Wrap Text Calibri (Body) 11A A Merge & Center | oblem 7 Your Company makes 3 products: A, B, &C.Your Co is considering dropping product B based on the following financial data from last year: Prod AProd 8 Prod C $600.00 $900.00 $360.00 $390.00 $720.00 $240.00 $210.00 $180.00 $120.00 Sales Variable costs Contribution margin $36.00 $60.00 $15.00 $33.00 $54.00 $24.00 $60.00 $96.00 $21.00 $A5.00 $60.00 30.00 $174.00 $270.00 $90.00 $36.00 $90.00 $30.00 Advertising expense Depreciation of special equipment Salaries of segment manager Indirect fixed costs Total fixed costs Net operating income (loss) The special equipment used exclusively by each segment can be sold for approximately book value Complete the following table to show the effect on Your Co's profit if it keeps or eliminates product 8 Drop B Keep B $180.00 $60.00 Contribution margin Advertising expense x Depreciation of special equipment$54.00 Salaries of segment manager Indirect fixed costs Net operating income (loss) $96.00 $60.00 $90.00 Incremental profit (loss) Should Your Co. drop product 8
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