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Whirpool makes a line of dishwashers that are distributed to retailers across the US to be sold to customers. The line consists of three models

Whirpool makes a line of dishwashers that are distributed to retailers across the US to be sold to customers. The line consists of three models of dishwashers.

Model Selling price per Unit Variable Cost per Unit Demand/Year (units)
1 225 100 4000
2 300 230 2500
3 350 275 3000

Whirpool is considering the addition of a fourth model of dishwasher. This model would be sold to retailers for $425. The variable cost of this unit is $220. The demand for the new Model 4 is estimted to be 1300 units per year, 60% of these unit sales of the new model is expected to come from other models already being manufactured by the company (30% model 1, 10% model 2, 60% model 3). The company will incur a fixed cost of $100,000 to add the new model to the line.

A. Based on this data, should Whirlpool add the new Model 4 to its line of dishwashers?

B. Why or why not?

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