Exercise 21-17 Tharp Company operates a small factory in which it manufactures two products: C and D. Production and sales results for last year were as follows. C Units sold 19,600 9,100 Selling price per unit $95 $75 Variable cost per unit Fixed cost per unit 52 39 25 25 For purposes of simplicity, the firm averages total fixed costs over the total number of units of C and D produced and sold. The research department has developed next year at a price of $115; the variable cost per unit of E is $40. The introduction of product E will lead to a 11% increase in demand for product C and discontinuation of product D. If the company does not introduce the new product, it expects next year's results to be the same as last year's new product (E) as a replacement for product D. Market studies show that Tharp Company could sell 11,200 units of E Compute company profit with products C & D and with products C & E Net profit with products C & D Net profit with products C & E Should Tharp Company introduce product E next year