Whispering Winds Company operates a small factory in which it manufactures two products: A and B. Production and sales results for this year were as follows:

		A		B
Units sold		8,900		18,600
Selling price per unit		$94		$75
Variable costs per unit		55		49
Fixed costs per unit		20		20

For purposes of simplicity, the firm averages total fixed costs over the total number of units of A and B produced and sold. The research department has developed a new product (C) as a replacement for product B. Market studies show that Whispering Winds Company could sell 9,850 units of C next year at a price of $118; the variable costs per unit of C are $50. The introduction of product C will lead to a 10% increase in demand for product A and discontinuation of product B. If the company does not introduce the new product, it expects next years results to be the same as this years. Determine whether Whispering Winds Company should introduce product C next year. Why or why not?

Company profit with Products A and B:
		A		B		Total
select an item Fixed costsSales revenueVariable costsUnits soldNet income (loss)Contribution margin		enter a number of units		enter a number of units
select an item Sales revenueNet income (loss)Fixed costsContribution marginVariable costsUnits sold		$enter a dollar amount		$enter a dollar amount		$enter a dollar amount
select between addition and deduction LessAdd: select an item Contribution marginSales revenueVariable costsUnits soldFixed costsNet income (loss)		enter a dollar amount		enter a dollar amount		enter a dollar amount
select a summarizing line for the first part Fixed costsUnits soldSales revenueVariable costsContribution marginNet income (loss)		$enter a total amount for the first part		$enter a total amount for the first part		enter a total amount for the first part
select between addition and deduction LessAdd: select an item Net income (loss)Variable costsContribution marginSales revenueUnits soldFixed costs						enter a dollar amount
select a closing name for this statement Variable costsSales revenueContribution marginUnits soldNet income (loss)Fixed costs						$enter a total net income or loss amount

Company profit with Products A and C:
		A		C		Total
select an item Fixed costsNet income (loss)Variable costsSales revenueUnits soldContribution margin		enter a number of units		enter a number of units
select an item Contribution marginFixed costsNet income (loss)Variable costsSales revenueUnits sold		$enter a dollar amount		$enter a dollar amount		$enter a dollar amount
select between addition and deduction AddLess: select an item Net income (loss)Units soldVariable costsContribution marginFixed costsSales revenue		enter a dollar amount		enter a dollar amount		enter a dollar amount
select a summarizing line for the first part Fixed costsSales revenueContribution marginVariable costsUnits soldNet income (loss)		$enter a total amount for the first part		$enter a total amount for the first part		enter a total amount for the first part
select between addition and deduction LessAdd: select an item Fixed costsUnits soldVariable costsSales revenueContribution marginNet income (loss)						enter a dollar amount
select a closing name for this statement Net income (loss)Variable costsContribution marginUnits soldFixed costsSales revenue						$enter a total net income or loss amount

Whispering Winds Company should / should not introduce product C next year as the contribution margin increased / decreased.