Kingbird Company operates a small factory in which it manufactures two products: A and B. Production and sales results for this year were as follows:

		A		B
Units sold		8,600		19,400
Selling price per unit		$98		$80
Variable costs per unit		52		52
Fixed costs per unit		23		23

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 product B. Market studies show that Kingbird Company could sell 10,400 units of C next year at a price of $124; the variable costs per unit of C are $48. 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 years results to be the same as this years. Determine whether Kingbird Company should introduce product C next year. Why or why not?

Company profit with Products A and B:
		A		B		Total
select an item Contribution marginUnits soldNet income (loss)Sales revenueFixed costsVariable costs		enter a number of units		enter a number of units
select an item Units soldSales revenueFixed costsContribution marginNet income (loss)Variable costs		$enter a dollar amount		$enter a dollar amount		$enter a dollar amount
select between addition and deduction LessAdd: select an item Units soldSales revenueContribution marginVariable costsFixed costsNet income (loss)		enter a dollar amount		enter a dollar amount		enter a dollar amount
select a summarizing line for the first part Fixed costsUnits soldVariable costsContribution marginNet income (loss)Sales revenue		$enter a total amount for the first part		$enter a total amount for the first part		enter a total amount for the first part
select between addition and deduction LessAdd: select an item Sales revenueVariable costsContribution marginUnits soldFixed costsNet income (loss)						enter a dollar amount
select a closing name for this statement Units soldNet income (loss)Variable costsFixed costsContribution marginSales revenue						$enter a total net income or loss amount

Company profit with Products A and C:
		A		C		Total
select an item Fixed costsNet income (loss)Sales revenueContribution marginUnits soldVariable costs		enter a number of units		enter a number of units
select an item Variable costsSales revenueUnits soldNet income (loss)Fixed costsContribution margin		$enter a dollar amount		$enter a dollar amount		$enter a dollar amount
select between addition and deduction LessAdd: select an item Fixed costsContribution marginSales revenueNet income (loss)Variable costsUnits sold		enter a dollar amount		enter a dollar amount		enter a dollar amount
select a summarizing line for the first part Variable costsContribution marginNet income (loss)Sales revenueFixed costsUnits sold		$enter a total amount for the first part		$enter a total amount for the first part		enter a total amount for the first part
select between addition and deduction AddLess: select an item Contribution marginNet income (loss)Units soldFixed costsSales revenueVariable costs						enter a dollar amount
select a closing name for this statement Fixed costsContribution marginNet income (loss)Units soldSales revenueVariable costs						$enter a total net income or loss amount

Kingbird Company select an option should notshould introduce product C next year as the contribution margin select an option increaseddecreased.