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Assume a company is considering adding a new product line with the following estimated cost and revenue data: Annual sales 6,000 units Selling price per

Assume a company is considering adding a new product line with the following estimated cost and revenue data:

Annual sales 6,000 units
Selling price per unit $ 180
Variable manufacturing costs per unit $ 140
Variable selling costs per unit $ 15
Incremental fixed manufacturing costs $ 65,000 per year
Incremental fixed selling costs $ 40,000 per year
Allocated common fixed administrative costs $ 45,000 per year

If the new product line is added, the company expects that it will increase the sales of complementary products, thereby generating $31,500 in incremental contribution margin from those products. What is the financial advantage (disadvantage) of adding the new product line?

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