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Patriot Co. manufactures and sells three products: red, white, and blue. Their unit selling prices are red, $48, white, $78, and blue $103. The per

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Patriot Co. manufactures and sells three products: red, white, and blue. Their unit selling prices are red, $48, white, $78, and blue $103. The per unit variable costs to manufacture and sell these products are red, $33, white, $53, and blue, $73. Their sales mix is reflected in a ratio of 4:5.2 (red white blue). Annual fixed costs shared by all three products are $143,000. One type of raw material has been used to manufacture all three products. The company has developed a new material of equal quality for less cost. The new material would reduce variable costs per unit as follows: red, by $8; white, by $18, and blue, by $8. However, the new material requires new equipment, which will increase annual fixed costs by $13,000

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