PROBLEM VI The management of Banter Inc. is considering the entry of its new Jokes product line in the market. Because its existing product line, Riddles, has similar characteristics to the new product line, management expects the Jokes sales to require a minimum of additional expense. It is also anticipated that Riddles sales will increase if both product lines are offered in a package deal. The Jokes product line would be manufactured in a company-owned facility that is now being rented to another firm for $600,000 per year. Depreciation on this facility and all other building expenses are presently $100,000 per year. In addition, the company will need to rent equipment to manufacture the new product line at an additional cost of $150,000 per year. The contribution margin for the Jokes product line would be $50 per unit, and annual sales are estimated at 10,000 units. Last year, sales for the Riddles product line amounted to 40,000 units. Other relevant per unit sales and cost data were: Selling price.. $100 Variable cost of goods sold. 25 Fixed cost of goods sold. 20 Variable marketing and administrative expenses... 10 Fixed marketing and administrative expenses 15 If the new Jokes product line is undertaken, the company expects a 10% increase in Riddles sales. Otherwise, Riddles sales will remain unchanged. Additional facilities will not be needed to manufacture the additional Riddles units. Should this product line be introduced? How will this affect the company's profits