PER UNIT PERCENT OF SALES SELLING .
Fixed expenses are $85,000 per month and the company is selling 2,700 units per month.
4.
value:
10.00 points
Required information
Required:
1-a. The marketing manager argues that a $9,000 increase in the monthly advertising budget would increase monthly sales by $20,000. Calculate the increase or decrease in net operating income.
1-b. Should the advertising budget be increased?
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5.
value:
10.00 points
Required information
2-a. Refer to the original data. Management is considering using higher-quality components that would increase the variable expense by $5 per unit. The marketing manager believes that the higher-quality product would increase sales by 20% per month. Calculate the change in total contribution margin.
2-b. Should the higher-quality components be used?
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