diversify in order to stabilize sales throughout the year. A natural area for the company to consider is the production of winter lotions and creams to prevent dry and chapped skin.

After considerable research, a winter products line has been developed. However, Silven's president has decided to introduce only one of the new products for this coming winter. If the product is a success, further expansion in future years will be initiated.

The product selected $($called Chap$-$Off$)$ is a lip balm that will be sold in a lipstick$-$type tube. The product will be sold to wholesalers in boxes of $24$ tubes for $$9$ per box. Because of excess capacity, no additional fixed manufacturing overhead costs will be incurred to produce the product. However, a $$99,000$ charge for fixed manufacturing overhead will be absorbed by the product undef the company's absorption costing system.

Using the estimated sales and production of $110,000$ boxes of Chap$-$Off, the Accounting Department has developed the following manufacturing cost per box:

$\backslash$table$[[$Direct material,$$4\mathrm{.}00$