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Erosion costs. Heavenly Cookie Company reports the following annual sales and costs for its current product line: Click on this icon to download the data
Erosion costs. Heavenly Cookie Company reports the following annual sales and costs for its current product line: Click on this icon to download the data from this table Chocolate Snicker Peanut Chip doodle Butter Volume 254,000 206,000 140,000 Price $0.60 $0.48 $0.55 Cost S0.20 $0.18 $0.17 Lemon Drop 85,000 $0.47 $0.22 Cream- Filled 97,000 $0.54 50.31 Heavenly is thinking of adding Mississippi Mud brownies to the product line. The ultra-rich brownies would sell for $0.93 a piece and cost $0.70 to produce. The forecasted brownie volume is 224,000 per year. Introduction of brownies, however, will reduce cookie sales by 176,000, with the following drops in sales per cookie: 100,000 in chocolate chip, 35,000 in snickerdoodle 25,000 in peanut butter, 7.000 in lemon drop, and 9,000 in cream-filled. What is the erosion cost of introducing the brownies? What is the net change in annual margin if Mississippi Mud brownies are added to the product line? . What is the erosion cost of introducing the brownies? (Round to the nearest dollar.)
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