Question
The company is considering adding a new product to its line of brewers targeted at the office-use market. The new brewer, the Office Plus, would
The company is considering adding a new product to its line of brewers targeted at the office-use market. The new brewer, the Office Plus, would sell for $250 per unit and would have variable unit costs of $160. Introducing the new model would increase fixed costs by 102,000 annually and would reduce annual unit sales of the Office Basic and Office Deluxe models by 10% each. Assuming no change to the sales of the Home Brewer model, How many units of the Office Plus model would need to be sold to justify its addition to the product line next year?
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