The Flint Fan Corporation is considering the addition of a new model fan, the F-27, to its current products. The expected cost and revenue data for the F-27 fan are as follows:

annual sales-4000

unit selling price- 58

unit variable costs:

production-34

selling-4

avoidable fixed costs:

production-20000

selling- 30000

allocated common fixed costs per year- 55000

If the F-27 is added as a new product, it is expected that the contribution margin of other products will drop by $7,000 per year.

5) At what selling price would the new product be just breaking even? 5)

A) $52.25 per unit C) $55.75 per unit

B) $49.00 per unit D) $50.50 per unit