Assume that Oxford Co.'s overhead costs are all fixed. A proposal is under consideration for the addition of a new line of product: cheese (for blessed are the cheese makers). Additional sales rev- enue would be $1,000,000 per year for 100,000 kg.s sold. Additional costs would be as follows: Direct materials Direct labor $ 100,000 $ 200,000 $ 500,000 $ 100,000 Production overhead Selling & administration Sales of the other three products would be unchanged. 

Required 

a) Should the cheese line be added?

Explain why or why not. (b) Would there be any effect on the reported operating income of the other three products?