were as follows Units sold Selling price per unit Variable cost per unit Fixed cost per unit 8 800 20 000 95 78 52 21 Net profit

Question

were as follows Units sold Selling price per unit Variable cost per unit Fixed cost per unit 8 800 20 000 95 78 52 21 Net profit with products C D Net profit with products C E D S For purposes of simplicity the firm averages total fixed costs over the total number of units of C and D produced and sold The research department has developed a new product E as a replacement for product D Market studies show that Tharp Company could sell 11 200 units of E next year at a price of 113 the variable cost per unit of E is 40 The introduction of product E will lead to a 12 increase in demand for product C and discontinuation of product D If the company does not introduce the new product it expects next year s results to be the same as last year s Compute company profit with products C D and with products C E S 42 21 two products C and D Production and sales results for last year Should Tharp Company introduce product E next year

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