The following income statement is for X Company's two products, A and B: ...
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Accounting
The following income statement is for X Company's two products, A and B:
| Product A | Product B | |||
| Revenue | $88,000 | $89,000 | ||
| Total variable costs | 51,920 | 52,510 | ||
| Total contribution margin | $36,080 | $36,490 | ||
| Total fixed costs | ||||
| Avoidable | 29,468 | 17,535 | ||
| Unavoidable | 25,102 | 12,185 | ||
| Profit | $-18,490 | $6,770 | ||
If X Company drops Product A because it shows a loss and is able to use the vacant space to increase sales of Product B by $33,500, with $4,600 of additional fixed costs, what will be the effect on firm profits?
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