Reference no: EM132963834

Question - Incremental Cash Flow - Fluffy Feather currently sells 18,000 customized handbags annually at an average price of $89 with variable cost of $49 each. It is considering adding a lower-priced line of handbags that sell for $59 with a variable cost of $39 each. It estimates it can sell 7,000 of the lower-priced handbags, but will sell 3,000 less of the higher-priced handbags by doing so. With a 35% tax rate, what is the incremental amount of sales revenue that Fluffy Feathers should include when evaluating the addition of the lower-priced handbags (round to nearest $1).