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The following income statement is for X Company's two products, A and B: Product A Product B Revenue $93,000 $92,000 Total variable costs 52,080 52,440
The following income statement is for X Company's two products, A and B: Product A Product B Revenue $93,000 $92,000 Total variable costs 52,080 52,440 Total contribution margin $40,920 $39,560 Total fixed costs Avoidable 28,480 16,296 Unavoidable 24,260 11,324 Profit $-11,820 $11,940 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 $35,900, with $5,000 of additional fixed costs, what will be the effect on firm profits?
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