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Tharp Company operates a small factory in which it manufactures two products: C and D. Production and sales results for last year were as follows.
Tharp Company operates a small factory in which it manufactures two products: C and D. Production and sales results for last year were as follows. C D Units sold 9,000 20,000 Unit selling price $95 $75 Unit variable costs 50 40 Unit xed costs 24 24 For purposes of simpl icity, the rm averages total xed costs over the total number of units of C and D produced and sold. The research department has developed a new product (E) as a replacement for product D. Market studies show that Tharp Company could sell 10,000 units of E next year at a price of $115; unit variable costs of E are $45. The introduction of product E will lead to a 10% increase in demand for product C and discontinuation of product D. If the company does not introduce the new product, it expects next year's results to be the same as last year's. Compute company prot with products C St E) and with products C & E. Net prot with products C 8: D $ Net prot with products C 8: E $
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