XYZ Manufacturing Company produces two types of products: Product A and Product B. The company is...

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XYZ Manufacturing Company produces two types of products: Product A and Product B. The company is deciding whether to continue manufacturing Product A or discontinue it. The following information is available for both products: Product A Product B Selling price per unit 45 50 Variable cost per unit 30 30 Allocated Fixed overhead costs. 20,000 15,000 Current sales volume: 2,500 units 3,000 units If Product A is discontinued, it is expected that 40% of the fixed overhead costs currently allocated to Product A can be avoided. The company has received a special order for 2,000 units of Product A at a reduced selling price of 35 per unit. Required: a) Calculate each product's total contribution margin (4 marks). b) Determine the current total net profit for the company (4 marks). c) Calculate the revised contribution margin for Product A if it is discontinued (4 marks). d) Determine the revised total net profit for the company if Product A is discontinued (4 marks). e) Evaluate whether the company should accept the special order for Product A based on relevant costing principles (4 marks). XYZ Manufacturing Company produces two types of products: Product A and Product B. The company is deciding whether to continue manufacturing Product A or discontinue it. The following information is available for both products: Product A Product B Selling price per unit 45 50 Variable cost per unit 30 30 Allocated Fixed overhead costs. 20,000 15,000 Current sales volume: 2,500 units 3,000 units If Product A is discontinued, it is expected that 40% of the fixed overhead costs currently allocated to Product A can be avoided. The company has received a special order for 2,000 units of Product A at a reduced selling price of 35 per unit. Required: a) Calculate each product's total contribution margin (4 marks). b) Determine the current total net profit for the company (4 marks). c) Calculate the revised contribution margin for Product A if it is discontinued (4 marks). d) Determine the revised total net profit for the company if Product A is discontinued (4 marks). e) Evaluate whether the company should accept the special order for Product A based on relevant costing principles (4 marks).