Crane Company operates a small factory in which it manufactures two products: A and B. Production and sales result for last year were as follow: For purposes of simplicity, the firm allocates 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 Crane Company could sell 11,640 units of C next year at a unit selling price of $80. The unit variable cost of C is $39. 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 result to be the same as last year's. (a) Your answer is correct. Calculate the net profit before the introduction of Product C. Net Profit eTextbook and Media (b) Calculate the net profit if Crane Company introduces Product C