Blossom Company operates a small factory in which it manufactures two products: A and B$.$ Production and sales result for last year

were as follow:

For purposes of simplicity, the firm allocates total fixed costs over the total number of units of A and $B$ produced and sold.

The research department has developed a new product $($C$)$ as a replacement for product B$.$ Market studies show that Blossom

Company could sell $14,840$ units of $C$ next year at a unit selling price of $$80.$ The unit variable cost of $C$ is $$39.$ 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 product, it expects next year's result to be the same as last year's.