A Company Has Two Different Products That Sell to Separate

question 107

True/False

A company has two different products that sell to separate markets. Financial data are as follows:
$$\begin{array} { | l | r | r | r | } \hline & \text { Product A } & \text { Product B } & { \text { Total } } \\\hline \text { Revenue } & \$ 16,000 & \$ 9,200 & \$ 25,200 \\\hline \text { Variable costs } & ( 6,000 ) & ( 9,300 ) & ( 15,300 ) \\\hline \text { Fixed costs (allocated) } & \$ ( 3,000 ) & ( 900 ) & \underline { ( 3,900 ) } \\\hline \text { Operating income (loss) } & \$ 7,000 & \$ ( 1,000 & \$ 6,000 \\\hline\end{array}$$ Assume that fixed costs are all unavoidable and that dropping one product would not impact sales of the other. Because the contribution margin of Product B is negative, it should be dropped.

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Adult Population

Individuals within a specified area or country who are above the age at which one legally becomes an adult, often considered for labor force and demographic analyses.

Labor Force

The total number of people who are available to work, including both the employed and those seeking employment.

Unemployment Rate Decrease

A reduction in the percentage of the labor force that is unemployed and actively seeking employment.

Labor Force Size

The total number of people aged 16 and over who are either employed or actively seeking employment.