Metlock Company operates a small factory in which it manufactures two products: A and B. Production and sales results for this year were as follows: B Units sold 9,500 18,900 Selling price per unit $96 $75 Variable costs per unit 51 49 Fixed costs per unit 20 20 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 Metlock Company could sell 10,300 units of C next year at a price of $125; the variable costs per unit of Care $46. 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 year's results to be the same as this year's. Determine whether Metlock Company should introduce product C next year. Why or why not? Company profit with Products A and B: B Total $ $ $ $ $ Company profit with Products A and C: A Total Net income (loss) Variable costs $ $ $ Units sold Sales revenue Fixed costs Contribution margin $ $ $ Metlock Company v introduce product C next year as the contribution margin