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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 $177,020 $89,500
The following income statement is for X Company and its only two products - A and B:
Total | Product A | Product B | |
Sales | $177,020 | $89,500 | $87,520 |
Variable Costs | 96,545 | 51,910 | 44,635 |
Contribution margin | $80,475 | $37,590 | $42,885 |
Fixed costs: | |||
Avoidable | 61,390 | 21,370 | 40,020 |
Unavoidable | 33,830 | 5,750 | 28,080 |
Profit | $-14,745 | $10,470 | $-25,215 |
Because Product B is showing a loss, X Company is considering dropping it and saving its avoidable fixed costs. If it drops Product B, X Company's new profits will be?
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