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The following are the budgeted profit functions for X Company's two products, A and B, for next year: Product A: P = .51 (R) -

The following are the budgeted profit functions for X Company's two products, A and B, for next year:

Product A: P = .51 (R) - $58,280

Product B: P = .42 (R) - $24,820

where R is revenue. Budgeted revenue for the two products are $90,000 and $89,000, respectively. Avoidable fixed costs for the two products are $35,551 and $14,644, respectively.

The company is considering dropping Product A because it appears to be losing money. If it does, the resulting freed-up resources can be used to increase revenue from sales of Product B by $37,400, but that will require $2,600 of additional fixed costs.

If X Company drops A and increases revenue from B, firm profits will change by

A: $1,692 B: $1,912 C: $2,161 D: $2,441 E: $2,759 F: $3,117

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