The following information is for X Company's two products, A and B: Product A Product...
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Accounting
The following information is for X Company's two products, A and B: Product A Product B Revenue $93,000 $90,000 Total contribution margin 39,990 41,400 Total fixed costs 25,750 57,620 Profit $14,240 $-16,220 $13,648 of Product A's fixed costs are avoidable; $29,962 of Product B's fixed costs are avoidable. X Company plans to drop Product B since it shows a loss and increase sales of Product A by $34,800. Accompanying the sales increase will be a fixed cost increase of $5,000. If X Company drops Product B and increases Product A sales, what will be the effect on firm profits?
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