Bridgeport Company operates a small factory in which it manufactures two products: A and B. Production and sales results for this year were as follows: A B Units sold 8,900 19,300 Selling price per unit $95 $79 Variable costs per unit 52 51 Fixed costs per unit 22 22 D For purposes of simplicity, the firm averages 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 Bridgeport Company could sell 11,950 units of C next year at a price of $122; the variable costs per unit of C are $50. 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 results to be the same as this year's. Determine whether Bridgeport Company should introduce product C next year. Why or why not? rofit with Products A and B: nue Variable costs on margin Fixed costs e (loss) $ Company profit with Products A and C: Units sold Sales revenue Less Variable costs A 8900 B 19300 845500 $ 1524700 $ 462800 i 382700 $ A 8900 $ 845500 462800 S Contribution margin 7 $ 382700 $ 984300 540400 C $ 11950 Total 1457900 tA $ 597500 860400 620400 i Total