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#6 The following income statement is for X Company's two products, A and B: Product A Product B Revenue $89,000 $95,000 Total variable costs 47,170
#6 The following income statement is for X Company's two products, A and B:
Product A | Product B | |||
Revenue | $89,000 | $95,000 | ||
Total variable costs | 47,170 | 54,150 | ||
Total contribution margin | $41,830 | $40,850 | ||
Total fixed costs | ||||
Avoidable | 28,830 | 15,837 | ||
Unavoidable | 28,830 | 12,443 | ||
Profit | $-15,830 | $12,570 |
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 $24,000, with $4,200 of additional fixed costs, what will be the effect on firm profits?
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