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Key Corporation is considering the addition of a new product. The expected cost and revenue data for the new product are as follows: 2,500 units
Key Corporation is considering the addition of a new product. The expected cost and revenue data for the new product are as follows: 2,500 units $ 304 Annua1 sales Selling price per unit ariable costs per V unlt $ 125 49 Avoidable fixed costs per yeari $50,000 $75,000 Allocated connon fixed corporate costs per year 55,000 eroduction Selling If the new product is added, the combined contribution margin of the other, existing products is expected to drop $65,000 per year Total common fixed corporate costs would be unaffected by the decision of whether to add the new product If the new product is added next year, the financial advantage (disadvantage) resulting from this decision would be: Mutiple Choice 5325.000 $145,000
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