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The following income statement is for X Company's two products, A and B: Product A Product B Revenue$87,000$85,000Total variable costs 49,590 50,150 Total contribution margin$37,410$34,850Total
The following income statement is for X Company's two products, A and B:Product AProduct BRevenue$87,000$85,000Total variable costs49,59050,150Total contribution margin$37,410$34,850Total fixed costsAvoidable31,69216,704Unavoidable21,12813,666Profit$-15,410$4,480
If X Company drops Product A because it shows a loss and is able to use the vacant space to increase sales of Product B by $37,600, with $4,200 of additional fixed costs, what will be the effect on firm profits?
A: $5,498B: $6,433C: $7,526D: $8,806E: $10,303F: $12,054
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