The ABCD company has decided to manufacture a new product that would complete its range of products.

The available cost data is as follows

Unit Costs	/ U
Raw Materials	300
Direct Labor 2 H-Direct Labor/u x 175 /H-Direct Labor	350
Variable Overhead Expenses 2 H-Direct Labor/u x 110 /H-Direct Labor	220
Fixed Overheads 2 H-Direct Labor/u x 150 /H-Direct Labor	300
Total Costs	1.170

Fixed overheads have been absorbed at the normal company rate of 150/H-Direct Labor.

It is estimated that by manufacturing the new product the fixed general expenses of the company will go from 7,800,000/year to 9,200,000/year.

The expected sales estimates are as follows:

a.- If P. V. U. = 1,250/u Sales. = 6,000 u. First year

b.- If P. V. U. = 1,400 /u Sales. = 2,500 u. First year

What decision should the ABCD manager make?