Cabin Creek Company is considering adding a new line of kitchen cabinets. The company's accountant provided the following estimated data for these cabinets:

Annual sales

selling price per unit

Variable manufacturing costs per unit

Variable selling costs per unit

Incremental fixed costs per year:

Manufacturing

Selling

Allocated common costs per year:

Manufacturing

Selling and administrative

$800$ units

$$3,530$

$$1,530$

$$380$

$$478,400$

$$58,000$

$$83,000$

$$115,000$

If the kitchen cabinets are added as a new product line, the company expects that the contribution margin earned from selling its ot products will decrease by $$206,000$ per year.

Required:

What is the annual financial advantage $($disadvantage$)$ of adding the new line of kitchen cabinets?

What is the lowest selling price per unit that could be charged for the cabinets and still make it economically desirable for the company to add the new product line?

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What is the annual financial advantage $($disadvantage$)$ of adding the new line of kitchen cabinets?