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?