The following are the budgeted profit functions for X Company's two products, A and B,...
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Accounting
The following are the budgeted profit functions for X Company's two products, A and B, next year:
Product A: P = .48 (R) - $53,940
Product B: P = .43 (R) - $24,260
where R is revenue. Budgeted revenue for the two products are $91,000 and $86,000, respectively. Unavoidable fixed costs for the two products are $19,418 and $10,432, respectively. The company is considering dropping Product A; if it does, the resulting freed-up resources can be used to increase revenue from sales of Product B by $15,500, with no additional fixed costs. If X Company drops A and increases revenue from B, firm profits will change by
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