You are considering purchasing a facility that produces high-quality ice cream from a company that has filed for bankruptcy. The facility will cost you $650,000, performing neglected maintenance will cost you $80,000, monthly inspections cost $1,000 each, milk costs $2.50/gallon (it takes 0.5 gallons to make 1 unit of ice cream), other ingredients costs $0.45 per unit of ice cream and employees earn $20.00/hr (it takes 3 minutes of work for 1 unit of ice cream).Assume that the questions that follow are based on production for one year.

#1) After one year, you are producing vanilla, chocolate and strawberry ice cream at a volume of 75,000 units/year of each flavor. Your total cost averaged out over the 3 flavors is $450,000 per flavor/year. You are considering adding a new flavor, cookie dough, to your lineup. You expect to be able to sell 40,000 units at a price of $6.00 per unit. Should you go ahead with production of this new flavor? Why or why not?

Group of answer choices

Yes; MR=MC

No; MR

No; MR>MC

Yes, MR

No; MR=MC

Yes; MR>MC