The following information is for X Company's two products, A and B: Product A Product B Revenue $92,000 $90,000 Total variable costs 54,280 46,800 Total contribution margin $37,720 $43,200 Total fixed costs Avoidable 16,411 30,335 Unavoidable 15,149 23,835 Profit $6,160 $-10,970

7. If X Company drops Product B because it shows a loss, what will be the effect on firm profits? $-12,865 You are correct. Your receipt no. is 150-7358 Help: Receipt Previous Tries

8. Assume that if X Company drops Product B, it can use the vacant space to increase sales of Product A by $24,100, but $4,000 of additional fixed costs will be incurred. This use of the vacant space will result in an increase in X Company's profits of? NEED 8 SHOW WORK!