Kenny, Inc. currently sells two products. They sell 28,900 units
of Product A per year and they sell these at an average cost of
$77,500 each. They sell 7,900 units of Product B per year and they
sell these at an average cost of $119,500 each. Kenny, Inc. wants
to introduce a new product that will be called Product C. They
estimate that they can sell 23,900 units of Product C each year
with an averge selling price of $23,500 each. The Market Research
department made a calculation that says by launching Product C, the
sales of Product A will increase by 3,500 units annually but the
sales of Product B will go down by 940 units annually. |
Calculate the appropriate amount of the annual sales figure that should be used when analyzing this new product. |
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