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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 $181,860 $93,430
The following Income Statement is for X Company and its only two products - A and B:
Total | Product A | Product B | |
Sales | $181,860 | $93,430 | $88,430 |
Variable Costs | 99,189 | 52,321 | 46,868 |
Contribution margin | $82,671 | $41,109 | $41,562 |
Fixed costs: | |||
Avoidable | 69,730 | 22,230 | 47,500 |
Unavoidable | 35,950 | 6,570 | 29,380 |
Profit | $-23,009 | $12,309 | $-35,318 |
Because Product B is showing a loss, X Company is considering dropping it, and in its place, increase sales of Product A by $15,720.
If it drops Product B and increases sales of Product A, X Company's profits will increase by?
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