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:

Societal Rules

Norms, guidelines, and laws established by a society to regulate behavior and maintain order among its members.

Singular Sense

The unique or individual meaning or perspective of a term or concept.

The Ego

According to Freud, is a psychological mechanism that balances the conflicting needs of the pleasure-seeking id and the restraining superego.

Impulsive

Acting or done without careful consideration of the possible consequences; driven by immediate desires.