A company is thinking about introducing a new product line. Below are the expected per$-$unit variable costs associated with producing and selling the new product:

Sales price $$100$

Direct materials $$29$

Direct labor $$10$

Variable overhead $$8$

Variable selling costs $$5$

In addition to the costs above, the company will incur an extra $$10,000$ per month in fixed costs if it introduces the product. The expected sales volume is $287$ units per month.

What is the total expected monthly financial impact $($i$..$e$,$ how will cash flows change$)$ if they introduce this product? $($calculate as total impact and not per unit$)$

Answer rating: 100% (QA)

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