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Assume a company is considering adding a new product. The expected cost and revenue data for this product are as follows: Annual sales 5,000 units

Assume a company is considering adding a new product. The expected cost and revenue data for this product are as follows:

Annual sales 5,000 units
Unit selling price $ 60
Unit variable costs:
Production $ 33
Selling $ 6
Incremental fixed costs per year:
Production $ 34,500
Selling $ 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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