A Company Has Two Different Products That Sell to Separate

question 32

True/False

A company has two different products that sell to separate markets.Financial data are as follows:
$$\begin{array} { | l | r | r | r | } \hline & \text { Product A } & \text { Product B } & { \text { Total } } \\\hline \text { Revenue } & \$ 12000 & \$ 8000 & \$ 20000 \\\hline \text { Variable cost } & ( \$ 7500 ) & ( \$ 8100 ) & ( \$ 15600 ) \\\hline \text { Fixed cost (allocated) } & ( \$ 3000 ) & ( \$ 1000 ) & ( \$ 4000 ) \\\hline \text { Profit } & \$ 1500 & ( \$ 1100 ) & \$ 400 \\\hline\end{array}$$
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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Definitions:

Physical Appearance

Refers to the outward look or aspects of a person, including body shape, facial features, hair, and other physical traits.

Visual Stimulus

Any object or event in the environment that can be seen and thus influences the behavior or perception of the observer.

Blindsight

A phenomenon in which individuals with certain types of brain damage can respond to visual stimuli without consciously perceiving them.

The Cocktail Party Effect

The ability to focus one's auditory attention on a particular stimulus while filtering out a range of other stimuli, as when a person can focus on a single conversation in a noisy environment.