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Pharoah Company operates a small factory in which it manufactures two products: Cand D. Production and sales results for last year were as follows. D
Pharoah Company operates a small factory in which it manufactures two products: Cand D. Production and sales results for last year were as follows. D Units sold 9.100 19.000 $94 $75 Unit selling price Unit variable costs Unit fixed costs 47 41 20 20 For purposes of simplicity, the firmaverages total fixed costs over the total number of units of Cand produced and sold, The research department has developed a new product(E) as a replacement for product D. Market studies show that Pharoah Company could sell 11.900 units of Enext year at a price of $114 unit variable costs of E are $45. The introduction of product will lead to a 11% increase in demand for product Cand discontinuation of product D. Ir the company does not introduce the new product, it expects next year's results to be the same as last year's 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 Pharoah Company introduce product Enext year
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