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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 $86,000 $91,000
Variable Costs 51,600 50,960
Fixed costs $51,570 $28,750
Profit $-17,170 $11,290

$6,704 of Product A's fixed costs are directly related to Product A; $4,600 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 droping Product A because of its reported loss

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

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