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Ken Garrett says
April 24, 2021 at 8:09 am
If B is discontinued, 400,000 is lost. If, however, discontinuance meant that a whole factory (for example) could be closed down then fixed costs (rent, heating etc) would be saved. If this saving were at least 400,000 then the product could be discontinued and profits would increase.
July 4, 2021 at 11:37 am
Sam question I hv with the ABC problem
April 23, 2021 at 5:14 pm
Could you please explain further the meaning of this sentence at the end of lecture notes, related to this lecture (p.168):
“Product B would be worth discontinuing only if the expected contribution at market price of:
2000 x (250 – 50) = 400,000
were compensated for by a reduction in fixed costs of that amount.”
January 30, 2020 at 4:00 pm
Thank you for the amazing work you are doing over there. I really enjoy your videos.
Please, I do not understand the analogy used under the ‘closing/continuing operation’ part of this video. Shouldn’t I be continuing operations where my saved cost is greater than my lost revenue? Confused.
Thanks in advance for your clarification
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