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1 . You have a small business selling cans of 3 2 1 LGB , a reasonably nasty - tasting energy drink. You sell each

1. You have a small business selling cans of 321LGB, a reasonably nasty-tasting energy drink. You sell each can of 321LGB for $8.00. Each can costs you $3.00 to purchase from the manufacturer. You pay your salesperson a 10% commission on all sales on top of a base salary of $1,300 per month. Your rent is $1,900 per month. Other miscellaneous costs (insurance, utilities, etc.) average $580 per month. You are pretty sure you can sell 1,200 cans per month at the $8.00 price point.A. How many cans do you need to sell to breakeven each month (round up to the nearest whole can)?B. How much monthly operating income will you have if you sell 1,200 cans per month?C. If tax rates are 20%, how much net income will you make if you sell 1,200 cans?You are considering offering a 15% off coupon for each can to increase sales. You think sales will increase to 2,000 cans per month (assuming each can will be purchased with a coupon). A fixed coupon processing fee of $600 will be incurred each month if you choose this strategy.D. How many cans will you need to sell each month to breakeven with the coupon strategy? Assume sales commissions will still be based on the $8.00 "listprice."E. How much monthly income will you have if you sell 2,000 cans each month with this coupon strategy?Another option you are considering involves spending $4,620 per month on an advertising campaign. You think that you can raise monthly sales to 3,000 cans at an undiscounted sales price of $8.00(i.e., no coupons, etc.).F. How many cans will you need to sell each month to breakeven with the advertising strategy (round up to the nearest whole can)?G. How much monthly operating income will you have if you sell 3,000 cans each month with the advertising strategy?Which strategy would be best if you thought you could sell 3,300 cans per month either with the coupons or the advertising? In other words:H. How much income would you make with the coupon strategy if you were able to sell 3,300 cans per month?I. How much would you make with the advertising strategy if you were able to sell 3,300 cans per month?Open Word
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