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The following information is for X Company's two products, A and B: Product A Product B Revenue $92,000 $88,000 Total contribution margin 38,640 36,960 Total

The following information is for X Company's two products, A and B:

Product A Product B
Revenue $92,000 $88,000
Total contribution margin 38,640 36,960
Total fixed costs 56,330 25,570
Profit $-17,690 $11,390

$29,292 of Product A's fixed costs are avoidable; $15,342 of Product B's fixed costs are avoidable. X Company plans to drop Product A since it shows a loss and increase sales of Product B by $24,100. Accompanying the sales increase will be a fixed cost increase of $4,000. If X Company drops Product A and increases Product B sales, what will be the effect on firm profits?

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