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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
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 g2e units selling price per unit $ 3,528 Variable manufacturing costs per unit 1,528 variable selling costs per unit % 370 Incremental fixed costs per year: Manufacturing $ 477,488 Selling 57,808 Allocated common costs per year: Manufacturing B2,008 Selling and administrative $ 114,888 ITthe kitchen cabinets are added as a new product line, the company expects that the contribution margin earmed from selling Its other preducts will decrease by $204,000 per year. Required: 1. What Is the annual financial advantage (disadvantage) of adding the new line of kitchen cabinets? 2. What Is the lowest selling price per unit that could be charged for the cabinets and still make it economically deslrable for the company to add the new product line? Complete this question by entering your answers in the tabs below. Required 1 Required 2 What is the annual financial advantage (disadvantage) of adding the new line of kitchen cabinets? Required 2 >
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