Operating income and average contribution margin ratio

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A company has annual revenues of $450,000, an average contribution margin ratio of 35%, and fixed expenses of $175,000. A new product with a $9.75 variable cost per unit is introduced. If 15,000 units of the new product could be sold at $16.00 per unit, and the company's other business did not change, calculate the company's total operating income and average contribution margin ratio. (The new product adds an additional $37,800 in fixed expense)

Reference no: EM13139399

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