Cuda, Inc., is thinking about adding a new product line. Marketing surveys indicate that sales of the new product would be 150,000 units. Each unit sells for $8. Direct variable costs would be $6.25 per unit, direct fixed costs would be $70,000, and $45,000 represents the company’s indirect fixed costs. Cuda does not expect the new product to affect the sales of its other products.

Should Cuda add the new product? Why or why not?