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Key Corporation is considering the addition of a new product. The expected cost and revenue data for the new product are as follows: If the new product is added, the combined contribution margin of the other, existing products is expected to drop $65,000 per year. Total common fixed corporate costs would be unaffected by the decision of whether to add the new product.
If the new product is added next year, the financial advantage (disadvantage) resulting from this decision would be:
Rationalization
A defense mechanism in psychology, where controversial behaviors or feelings are justified and explained in a seemingly rational or logical manner to avoid the true explanation.
Justifies Act
A rationale or reason given for taking a specific action, often framed in moral, logical, or practical terms.
Compromise Mechanism
A psychological strategy where conflicting demands are met by finding a middle ground or mutual concession, thus reducing internal tension.
Rationalization
A defense mechanism where controversial behaviors or feelings are justified and explained in a seemingly rational or logical manner to avoid the true explanation.
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