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The following information is for X Company's two products, A and B: Product A Product B Revenue $87,000 $87,000 Total contribution margin 35,670 40,890 Total

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

Product A Product B
Revenue $87,000 $87,000
Total contribution margin 35,670 40,890
Total fixed costs 32,080 50,320
Profit $3,590 $-9,430

$18,286 of Product A's fixed costs are avoidable; $28,682 of Product B's fixed costs are avoidable. X Company plans to drop Product B since it shows a loss and increase sales of Product A by $36,800. Accompanying the sales increase will be a fixed cost increase of $3,600. If X Company drops Product B and increases Product A sales, what will be the effect on firm profits?

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