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The following information is for X Company's two products - A and B: Product A Product B Sales $91,000 $88,000 Total contribution margin 36,400 35,200
The following information is for X Company's two products - A and B:
Product A | Product B | |
Sales | $91,000 | $88,000 |
Total contribution margin | 36,400 | 35,200 |
Fixed costs: | ||
Avoidable | 21,000 | 37,500 |
Unavoidable | 6,000 | 27,000 |
Profit | $9,400 | $-29,300 |
The company is considering dropping Product B because of the $29,300 loss. If X Company drops Product B, it can use the freed-up resources to increase sales of Product A by $11,700. If X Company drops Product B and increases sales of A by $11,700, firm profits will change by
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