E7-17 Straus Company operates a small factory in which it manufactures two prod- ucts: A and B. Production and sales results for last year were as follows: 8,000 20,000 Units sold $95 $78 Selling price per unit 50 Variable costs per unit Fixed costs per unit For purposes of simplicity, the firm averages 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 prod- uct B. Market studies show that Straus Company could sell 11,000 units of C next year at a price of $120; the variable costs per unit of Care $42. 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 results to be the as last years. Instructions company introduce product C next year? Explain why or why not. Show calculations to support your decision. (CMA-Canada adapted