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6 The following income statement is for X Company's two products, A and B: Product Product A A B Revenue $90,000 $89,000 Total variable 47,700
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The following income statement is for X Company's two products, A and B: Product Product A A B Revenue $90,000 $89,000 Total variable 47,700 52,510 costs Total contribution $42,300 $36,490 margin Total fixed costs Avoidable 28,765 16,289 Unavoidable 23,535 15,651 Profit $-10,000 $4,550 If X Company drops Product A because it shows a loss and is able to use the vacant space to increase sales of Product B by $34,900, with $4,800 of additional fixed costs, what will be the effect on firm profits? A: $-2,148 B: $-2,514 C: $-2,941 D: $-3,441 E: $-4,026 F: $-4,710Step by Step Solution
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