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

Product A: P = .43 (R) - $31,670

Product B: P = .53 (R) - $59,930

where R is revenue. Budgeted revenue for the two products are $87,000 and $92,000, respectively. Unavoidable fixed costs for the two products are $12,035 and $25,770, respectively.

The company is considering dropping Product B 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 A by $36,200, but that will require $2,400 of additional fixed costs.

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