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The following income statement is for X Company and its only two products - A and B: Total Product A Product B Sales $181,040 $89,400
The following income statement is for X Company and its only two products - A and B:
Total | Product A | Product B | |
Sales | $181,040 | $89,400 | $91,640 |
Variable Costs | 106,791 | 53,640 | 53,151 |
Contribution margin | $74,249 | $35,760 | $38,489 |
Fixed costs: | |||
Avoidable | 58,520 | 37,050 | 21,470 |
Unavoidable | 36,510 | 29,450 | 7,060 |
Profit | $-20,781 | $-30,740 | $9,959 |
Because Product A is showing a loss, X Company is considering dropping it and saving its avoidable fixed costs. If it drops Product A, X Company's new profits will be
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