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The following information is for X Company's two products, A and B: Product A Product B Revenue $90,000 $85,000 Total variable costs 52,200 48,450 Total
The following information is for X Company's two products, A and B:
Product A | Product B | |||
Revenue | $90,000 | $85,000 | ||
Total variable costs | 52,200 | 48,450 | ||
Total contribution margin | $37,800 | $36,550 | ||
Total fixed costs | ||||
Avoidable | 27,832 | 15,778 | ||
Unavoidable | 23,708 | 13,992 | ||
Profit | $-13,740 | $6,780 |
Assume that if X Company drops Product A, it can use the vacant space to increase sales of Product B by $35,700, but $3,200 of additional fixed costs will be incurred. This use of the vacant space will result in an increase in X Company's profits of what?
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