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please answer soon!! thank you A company has a product called Product X and is considering launching a new product called Product Y. If they
please answer soon!! thank you
A company has a product called Product X and is considering launching a new product called Product Y. If they launch Product Y, 10% of customers who currently buy product X are expected to stop buying Product X and buy Product Y instead. Currently, the company sells about 40,000 Product X's each year, and each unit has a contribution margin of $39. The company has enough excess production capacity to produce Product Y, but would have to hire a new product line supervisor for $59,000 per year to oversee Product Y. The following estimates all pertain to product Y: Total estimated sales (units): 15,000 per year Selling price per unit: $32.00 Variable cost per unit: $8.00 What is the estimated incremental annual cash flow associated with launching Product Y(i.e., how much do you expect cash flows to increase or decrease if Product Y is launched)? (Indicate an increase in cash flows as positive number and a decrease as a negative number.) Question 4 1 pts A company sells a single product with a contribution margin of $20 per unit. The company currently sells 1800 units per year and management believes that if they reduce the sales price by $1 per unit, sales will increase by 17%. How much will annual profit change if they take this action? (Round your final answer to the nearest dollar. Make sure to calculate the change in profit and not the new total profit. Indicate an increase in profit with a positive number and a decrease in profit with a negative number.)Step by Step Solution
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