The Western Company Is Considering the Addition of a New

Multiple Choice

The Western Company is considering the addition of a new product to its current product lines. The expected cost and revenue data for the new product are as follows: If the new product is added to the existing product line, then sales of existing products will decline. As a consequence, the contribution margin of the other existing product lines is expected to drop $78,000 per year.
-If the new product is added next year,the increase in net operating income resulting from this decision would be:

A) $387,000
B) $261,000
C) $183,000
D) $207,000