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1. Chap 5 - Cost/Volume/Profit Below are the most current financials for your company. Your product sells for $350 each and the variable cost is
1. Chap 5 - Cost/Volume/Profit Below are the most current financials for your company. Your product sells for $350 each and the variable cost is $220 per unit. The marketing group says that unit sales will increase by 10% if they can spend an additional $8,000 in marketing expense next month. What will next months Income Statement look like if what they say is true? Create a projected Income Statement next to the one provided. Based on your calculations, is what the marketing group suggesting a good decision? Why or why not? 400 units Marketing Forecast Sales $140,000 Less: Variable Expenses $88,000 Contribution Margin $52,000 Less: Fixed Expenses $22,000 Net Operating Income $30,000
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