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The following information is for X Company's two products, A and B: Product A Product B Revenue $92,000 $89,000 Total contribution margin 38,640 36,490 Total

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

Product A Product B
Revenue $92,000 $89,000
Total contribution margin 38,640 36,490
Total fixed costs 56,860 27,960
Profit $-18,220 $8,530

$31,273 of Product A's fixed costs are avoidable; $16,217 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 $27,500. Accompanying the sales increase will be a fixed cost increase of $4,800. If X Company drops Product A and increases Product B sales, what will be the effect on firm profits?

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