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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 $87,000 $95,000
Variable Costs 50,460 53,200
Fixed costs $28,250 $52,580
Profit $8,290 $-10,780

$5,085 of Product A's fixed costs are directly related to Product A; $6,310 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 B because of its reported loss

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

A: $-15,085 B: $-20,064 C: $-26,685 D: $-35,490 E: $-47,202 F: $-62,779

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