The Flint Fan Corporation Is Considering the Addition of a New

Multiple Choice

The Flint Fan Corporation is considering the addition of a new model fan, the F-27, to its current products.The expected cost and revenue data for the F-27 fan are as follows: If the F-27 is added as a new product, it is expected that the contribution margin of other products will drop by $7, 000 per year. If the F-27 product is added next year, the change in operating income should be:

A) $30, 000 increase
B) $5, 000 decrease
C) $23, 000 increase
D) $15, 000 increase