The following income statement is for x company and its only two products - a and b:

total product a product b
sales $174,760 $85,650 $89,110
variable costs 96,836 51,390 45,446
contribution margin $77,924 $34,260 $43,664
fixed costs:
avoidable 71,970 24,600 47,370
unavoidable 31,500 5,270 26,230
profit $-25,546 $4,390 $-29,936
because product b is showing a loss, x company is considering dropping it and saving its avoidable fixed costs. if it drops product b, x company's new profits will be

The answer is $4,390

Explanation:

Product A. Product B. Total

$ $ $

Sales. 85,650. 89,110. 174,760

Less: Variable cost. (51,390) (45,446) (96,836)

Contribution. 34,260. 43,664. 77,924

Less : Fixed cost

Avoidable. (24600) (47,370) (71,970)

Unavoidable. (5,270) (26,230) (31,500)

Net Profit/ Loss. 4,390 profit. ( 29,936) loss (25,546) loss

Note The statement shows clearly that on the present budget, the product B shows a loss of $29,936 and this is the reason while X company is considering dropping it. Since it drop product B then X company new profit will be $4,390

the answer to this question would be shared investment

answer; comparing the additional benefits and costs;