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o Question 10 10 pts The Western Company is considering the addition of a new product to its current productes The expected cost and revenue data for the new product are as follows Annual Sales 3.000 units Selling price per unit 5310 Valable costs per unit Production 5130 Selling $50 Directed costs per ye Production $51000 Seling $75,000 Unavoidable allocated fed corporate costs per $54.000 year the new product is added to the existing product line sales of existing products will decine Therefore, the contribution margin of the existing product lines is expected to drop by 578.000 per year Required 11 the new product is added next year, what would be the change in net lecome resulting from this decision? (4 marks 2) What is the lowest selling price per unit that could be charged for the new product without reducing the net income from its current level? 14 mars If the new product is added to the existing product line, sales of existing products will decline. Therefore, the contribution margin of other existing product lines is expected to drop by $78,000 per year. Required: 1) If the new product is added next year, what would be the change in net income resulting from this decision? (4 marks) 2) What is the lowest selling price per unit that could be charged for the new product without reducing the net income from its current level? (4 marks) 3) If the company is only able to sell 2.500 units of the 3,000 units of new product produced during the year while the contribution margin of other existing products still drops by $78,000. What is the impact on net income reported by the company compared to the scenario in part 1)? (No need to calculate; simply discuss the direction of the change). (2 marks) Edit View Insert Format Tools Table 12pt Paragraph BIVAL : o Question 10 10 pts The Western Company is considering the addition of a new product to its current productes The expected cost and revenue data for the new product are as follows Annual Sales 3.000 units Selling price per unit 5310 Valable costs per unit Production 5130 Selling $50 Directed costs per ye Production $51000 Seling $75,000 Unavoidable allocated fed corporate costs per $54.000 year the new product is added to the existing product line sales of existing products will decine Therefore, the contribution margin of the existing product lines is expected to drop by 578.000 per year Required 11 the new product is added next year, what would be the change in net lecome resulting from this decision? (4 marks 2) What is the lowest selling price per unit that could be charged for the new product without reducing the net income from its current level? 14 mars If the new product is added to the existing product line, sales of existing products will decline. Therefore, the contribution margin of other existing product lines is expected to drop by $78,000 per year. Required: 1) If the new product is added next year, what would be the change in net income resulting from this decision? (4 marks) 2) What is the lowest selling price per unit that could be charged for the new product without reducing the net income from its current level? (4 marks) 3) If the company is only able to sell 2.500 units of the 3,000 units of new product produced during the year while the contribution margin of other existing products still drops by $78,000. What is the impact on net income reported by the company compared to the scenario in part 1)? (No need to calculate; simply discuss the direction of the change). (2 marks) Edit View Insert Format Tools Table 12pt Paragraph BIVAL

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