Erosion costs.

Heavenly Cookie Company reports the following annual sales and costs for its current product line:

	Chocolate Chip	Snicker- doodle	Peanut Butter	Lemon Drop	Cream- Filled
Volume	251,000	206,000	142,000	81,000	96,000
Price	$0.60	$0.48	$0.53	$0.45	$0.52
Cost	$0.23	$0.19	$0.16	$0.23	$0.30

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 $0.75 to produce. The forecasted brownie volume is 224,000 per year. Introduction of brownies, however, will reduce cookie sales by 177,000, with the following drops in sales per cookie:100,000 in chocolate chip,36,000 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?