Qoah Company is considering adding a new type of product, Product Z, to its product...
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Qoah Company is considering adding a new type of product, Product Z, to its product lines.
Qoah Company is considering adding a new type of product, Product Z, to its product lines. Below are revenue and variable-cost estimates prepared to help analyze this possible product introduction: 12,500 units $50 Annual Sales Selling price per unit Unit variable costs: Production Selling $20 $21 If Product Z is introduced, the product line will include $110,000 in annual fixed cost, composed of $27,000 in newly incurred fixed costs in production; $33,000 in newly incurred fixed costs in sales, and $50,000 in allocated corporate-level costs (reducing allocation to other product lines by $50,000). Also, if Product Z is introduced, it will likely boost sales of Qoah Company's current products, increasing the total contribution margin from current products by $26,000. Q:) What is the change in the company's net operating income if the new product is introduced? (Key in a positive number if it is an increase, a negative number if it is a decrease.) A:) $
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