5P?.42A 1 LG 1, } Straus Company operates a small factor}? in which it manufactures two products: A and B. Production and sales results for this year were as follows: A B Units sold 9,0oo 2o,ooo Selling price per unit $95 S?5 Variable costs per unit 50 40 Fixed costs per unit 22 22 For purposes of simplicity, the rm averages total xed costs over the total number of units of A and E produced and sold. The research department has developed a new product (C) as a replacement for product E. Market studies show that Straus Company could sell 10,000 units of C next year at a price of 3115; the variable costs per unit of C are 340. The introduction of product C will lead to a 10% increase in demand for product A and discontinuation of product B. If the company does not introduce the new productJ it expects next year's results to be the same as this year's. Instructions Determine whether Straus Company should introduce product C next year. Explain why or why not. Show calculations to support your decision