Question 35 of 35 - / 15 III View Policies Current Attempt in Progress Sunland Company operates a small factory in which it manufactures two products: A and B. Production and sales results for this year were as follows: A B Units sold 8,600 18,700 Selling price per unit $94 $78 Variable costs per unit 55 53 Fixed costs per unit 21 21 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 Sunland Company could sell 11,350 units of C next year at a price of $121; the variable costs per unit of Care $45. 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 Sunland Company should introduce product C next year. Why or why not? Company profit with Products A and B: B $ $ $ $ Company profit with Products A and C: A $ $ $ $ $ Variable costs Net income (loss) Contribution margin Fixed costs Sales revenue Units sold $ Sunland Company introduce product C next year as the contribution margin Save for Later Attempts: 0 of 2 used Submit