Key Corporation Is Considering the Addition of a New Product

question 91

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.
-If the new product is added next year,the financial advantage (disadvantage) resulting from this decision would be:

• A) $325,000
• B) $200,000
• C) $145,000
• D) $135,000

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Definitions:

Chloride Ions

Negatively charged ions (Cl-) that are typically found in extracellular fluid and play critical roles in the body's electrolyte balance.

Epithelial Cells

Cells that cover the surfaces of the body and its organs, serving as a protective barrier and involved in absorption and secretion.

Genotype AA

A genetic configuration where an individual possesses two alleles of type A for a particular gene, denoting a homozygous condition.

Type B Blood

One of the ABO blood types characterized by the presence of the B antigen on red cells and the presence of anti-A antibody in the plasma.