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The following information is for X Company's two products, A and B: Product A Product B Revenue $91,000 $89,000 Total contribution margin 44,590 36,490 Total

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

Product A Product B
Revenue $91,000 $89,000
Total contribution margin 44,590 36,490
Total fixed costs 57,040 31,380
Profit $-12,450 $5,110

$28,520 of Product A's fixed costs are avoidable; $18,200 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 $34,000. 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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