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13.75 is not correct answer for a) D&R Corp. has annual revenues of $278,000, an average contribution margin ratio of 32%, and fixed expenses of
13.75 is not correct answer for a)
D&R Corp. has annual revenues of $278,000, an average contribution margin ratio of 32%, and fixed expenses of $103,300. Required: a. Management is considering adding a new product to the company's product line. The new item will have $8.8 of variable costs per unit. Calculate the selling price that will be required if this product is not to affect the average contribution margin ratio. (Round your answer to 2 decimal places.) Selling price $ 13.75 per unit b. If the new product adds an additional $30,100 to D&R's fixed expenses, how many units of the new product must be sold at the price calculated in part a to break-even on the new product? (Do not round intermediate calculations.) Break even en units c. If 19,400 units of the new product could be sold at a price of $13.7 per unit, and the company's other business did not change, calculate D&R's total operating income and average contribution margin ratio. (Round your intermediate calculations to 2 decimal places. Round "Average contribution margin ratio" to 2 decimal places.) Total operating income Average contribution margin ratioStep by Step Solution
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