Reference no: EM132803737
Question - Star Lord expects the following results, without considering any of the changes described below:
Product A Product B Total
Sales P100,000 P300,000 P400,000
Variable costs 40,000 100,000 140,000
Contribution margin P60,000 P200,000 P260,000
Fixed costs - avoidable (20,000) (30,000) (50,000)
Fixed costs - unavoidable* (50,000) (100,000) (150,000)
Profit (loss) (P10,000) P70,000 P60,000
* based on unit sales of 100 A and 200 B.
If product A were dropped and unit sales of product B increased by 60%, what would the company's income be?
a. P20,000
b. P140,000
c. P120,000
d. P200,000
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