Key Corporation Is Considering the Addition of a New Product

question 141

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:

Environmental Stewardship

The responsibility for environmental quality shared by all those whose actions affect the environment, emphasizing sustainable practices and conservation.

Marketing Strategy

A comprehensive plan designed to achieve marketing objectives by delivering value to customers and gaining a competitive advantage.

Ethical Issue

A situation or problem requiring individuals or organizations to choose between alternatives that must be evaluated as right (ethical) or wrong (unethical).