Question
Brazen Copy Products is launching a new product which is likely to cannibalize sales of two of its own existing products. Their original Alpha1 product
Brazen Copy Products is launching a new product which is likely to cannibalize sales of two of its own existing products. Their original Alpha1 product sells for $15.90 and carries a variable cost of $7.20 per unit. Selling price and variable cost for the follow-up Beta2 are $16.60 and $7.80. Their all-new Chi3 will sell for $21.30 with variable cost of $15.50 per unit. Brazen Copy expects to to sell 125 thousand units of the Chi3 when it is launched, but then expects to lose 39 thousand units sales of the Alpha1 and 29 thousand units in sales of the Beta2. What would be the WEIGHTED CONTRIBUTION MARGIN for the new Chi3? (Rounding: penny, or two decimal places.)
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