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  3. the following information is for x company's two p

The following information is for X Company's two products, A and B, last year: ...

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Accounting

The following information is for X Company's two products, A and B, last year:

Product A Product B

Sales $87,870 $92,940

Total variable costs 45,692 55,764

Total fixed costs 61,770 30,280

Profit $-19,592 $6,896

Because of the reported loss for Product A, X Company is considering dropping it. Further analysis reveals that $28,940 of Product A's fixed costs and $6,300 of Product B's fixed costs are common costs that the company allocates to the two products.

7. If X Company drops Product A, company profits will change by___________?

8. Assume that sales of Product B can be increased by $18,690 if Product A is dropped. What will be the effect of this increase on company profits?

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