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Coronado Company operates a small factory in which it manufactures two products: A and B. Production andsales results for this year were as follows: For

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Coronado Company operates a small factory in which it manufactures two products: A and B. Production andsales results for this year were as follows: For nitheses of simplicity, the firm averages total fixed costs over the tokal number of units of Aand B produced and sold. The research department has developed a new product (C) as a replacemencri pr wune B. Market studies show that Coronado Company could sell 11.900 units of C nextyear at a price of $125; the variable costs per unit of C are $50. The introduction of product C will lead to a 109 increase in demand for product A and discontinuation of product B. If the company does not introduce the new product, it expects nextyear's results to be the same as this year's. Determine whether Coronado Company should introduce product C nextyear. Why or whynot? Company profitwith Products A and B: 1

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