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Cullumber Company operates a small factory in which it manufactures two products: A and B. Production and sales result for last year were as follow:

Cullumber Company operates a small factory in which it manufactures two products: A and B. Production and sales result for last year were as follow:

A

B

Units sold

10,240 20,480

Selling price per unit

65 52

Unit variable cost

35 30

Unit fixed cost

15 15

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 Cullumber Company could sell 15,480 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.

Calculate the net profit if Cullumber Company introduces Product C.

Net Profit $enter the net profit in dollars

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