WILL RATE YOUR ANSWER The following income statement is for X Company's two products, A...
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Accounting
WILL RATE YOUR ANSWER
The following income statement is for X Company's two products, A and B: Product A Product B Revenue $93,000 $93,000 Total variable costs 55,800 50,220 Total contribution margin $37,200 $42,780 Total fixed costs Avoidable 14,556 30,542 Unavoidable 9,704 24,988 Profit $12,940 $-12,750 If X Company drops Product B because it shows a loss and is able to use the vacant space to increase sales of Product A by $35,900, with $3,000 of additional fixed costs, what will be the effect on firm profits?
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