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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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