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4 Assume a company is considering adding a new product. The expected cost and revenue data for this product are as follows: Annual sales
4 Assume a company is considering adding a new product. The expected cost and revenue data for this product are as follows: Annual sales Unit selling price Unit variable costs: Production Selling Incremental fixed costs per year: Production Selling 5,000 units $ 60 $ 33 $ 6 $ 34,500 $ 45,000 If the company adds the new product, it expects the contribution margin of other product lines to drop by $15,300 per year. What is the financial advantage (disadvantage) of adding the new product?
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