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The following information is for three of X Company's products: Product A Product B Product C Contribution margin rate 0.35 0.40 0.44 Fixed costs $27,608
The following information is for three of X Company's products:
Product A | Product B | Product C | |
Contribution margin rate | 0.35 | 0.40 | 0.44 |
Fixed costs | $27,608 | $49,720 | $27,874 |
Profit | $6,902 | $-4,520 | $11,946 |
Sales of Product B were $113,000, but X Company is still considering dropping it because of its reported loss. If it does, $24,860 of the fixed costs associated with it can be avoided, and sales of Product A can be increased by $41,300.
Q) If X Company does drop Product B and increases sales of Product A, X Company's profits will change by
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