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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 $178,940 $86,400
The following Income Statement is for X Company and its only two products - A and B:
Total Product A Product B
Sales $178,940 $86,400 $92,540
Variable Costs 97,614 45,792 51,822
Contribution margin $81,326 $40,608 $40,718
Fixed costs:
Avoidable 46,850 22,390 24,460
Unavoidable 34,620 29,230 5,390
Profit $-144 $-11,012 $10,868
Because Product A is showing a loss, X Company is considering dropping it, and in its place, increase sales of Product B by $14,890. If it drops Product A and increases sales of Product B, X Company's profits will increase by
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