Key Corporation is considering the addition of a new product. The expected cost and revenue data for the new product are as follows Annual sales Selling price per unit Variable costs per unit: 2,500 units $304 Production Selling $ 125 $ 49 Avoidable fixed costs per year: Production Selling $50,000 $75,000 $55,000 Allocated common fixed corporate costs per year 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 If the new product is added next year, the financial advantage (disadvantage) resulting from this decision would be.

Wo firms, a and b, each currently dump 50 tons of chemicals into the local river. the government has decided to reduce the pollution and from now on will require a pollution permit for each ton of pollution dumped into the river. it costs firm a $100 for each ton of pollution that it eliminates before it reaches the river, and it costs firm b $50 for each ton of pollution that it eliminates before it reaches the river. the government gives each firm 20 pollution permits. government officials are not sure whether to allow the firms to buy or sell the pollution permits to each other. what is the total cost of reducing pollution if firms are not allowed to buy and sell pollution permits from each other? what is the total cost of reducing pollution if the firms are allowed to buy and sell permits from each other? a. $3,000; $1,500 b. $4,500; $3,500 c. $4,500; $4,000 d. $4,500; $2,500