Key Corporation Is Considering the Addition of a New Product

question 409

Multiple Choice

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.At what selling price would the new product be just breaking even?

• A) $246 per unit
• B) $250 per unit
• C) $232 per unit
• D) $282 per unit

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Definitions:

Stem-And-Leaf Plot

A graphical method of displaying quantitative data that splits each value into a "stem" (the leading digit or digits) and a "leaf" (the last digit).

Frequency Distribution

A summary of how often each value occurs in a data set, typically represented in a table or as a graph.

Dotplot

A graphical display of data using dots, where each dot represents one or more observations, allowing for the visualization of the distribution of the data set.

Frequency Distribution

A tabular or graphical representation showing how often different values occur in a dataset.