The following income statement is for X Company's two products, A and B:

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A B

revenue 88000 89000

total variable cost 50160 49840

Total contribution margin 37840 39160

total fixed cost : avoidable 17040 27316

unavoidable 15730 26244

profit 5070 -14400

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 $32,300, with $3,600 of additional fixed costs, what will be the effect on firm profits?

Related Book For answer-question

Matching Supply with Demand An Introduction to Operations Management

ISBN: 978-0073525204

3rd edition

Authors: Gerard Cachon, Christian Terwiesch

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Posted Date: Mar 29, 2022 03:11 AM

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The following income statement is for X Company's two products, A and B:

Question:

Expert Answer:

to analyze the effect of dropping Product B and increasing sales of Product A on X Companys profits ... View the full answer

Matching Supply with Demand An Introduction to Operations Management

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