The company is considering dropping product b because of

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Reference no: EM13579258

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

	Product A	Product B
Sales	$86,000	$85,000
Total contribution margin	35,260	34,000
Fixed costs:
Avoidable	22,000	44,500
Unavoidable	6,000	30,000
Profit	$7,260	$-40,500

The company is considering dropping Product B because of the $40,500 loss. If X Company drops Product B, it will use the freed-up resources to increase sales of Product A by $14,000. If X Company drops Product B and increases sales of A, firm profits will change by?

Reference no: EM13579258

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