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

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Accounting

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

Product A Product B
Revenue $95,000 $93,000
Variable Costs 53,200 55,800
Fixed costs $50,760 $28,600
Profit $-8,960 $8,600

$10,152 of Product A's fixed costs are directly related to Product A; $2,860 of Product B's fixed costs are directly related to Product B. All other fixed costs are allocated to the individual products. X Company is considering dropping Product A because of its reported loss

If it drops Product A, what will be the effect on firm profits?

A: $-20,255 B: $-25,318 C: $-31,648 D: $-39,560 E: $-49,450 F: $-61,812

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