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Chocolate Chip 250,000 $0.40 $0.22 Snicker- doodle 205,000 $0.49 $0.20 Peanut Butter 143,000 $0.52 $0.18 Lemon Drop 80,000 $0.47 $0.24 Cream Filled 98,000 $0.56 $0.32
Chocolate Chip 250,000 $0.40 $0.22 Snicker- doodle 205,000 $0.49 $0.20 Peanut Butter 143,000 $0.52 $0.18 Lemon Drop 80,000 $0.47 $0.24 Cream Filled 98,000 $0.56 $0.32 Volume Price Cost Heavenly is thinking of adding Mississippi Mud brownies to the product line. The ultra-rich brownies would sell for $0.96 a piece and cost $0.75 to produce. The forecasted brownie volume is 220,000 per year. Introduction of brownies, however, will reduce cookie sales by 196,000, with the following drops in sales per cookie 110,000 in chocolate chip, 40,000 in snickerdoodle, 28,000 in peanut butter, 8,000 in lemon drop, and 10,000 in cream-filled. What is the erosion cost of introducing the brownies? What is the net change in annual margin if Mississippi Mud brownies are added to the product line? What is the erosion cost of introducing the brownies? $(Round to the nearest dollar.) Enter your answer in the answer box and then click Check
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