1.Danny's Manufacturing Company (DMC) sells ababy's high chair for $50.DMC has a contribution margin ratio of 40% and annual fixed expenses of $250,000.In 2012, DMC sold 10,000 high chairs.DMC was disappointed in its results and is contemplating the following actions:

Lower the selling price of its product by 10%.

Reduce the fixed salaries of salesmen by $50,000 and give salesmen a commission of $2.00 per high chair sold.

Change the manufacturing process to reduce variable costs by $8.00 per high chair produced while increasing fixed expenses by $150,000.

If DMC implements this plan, they will increase sales volume by 20%.