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Surething CD Company reports sales of $720,000, variable costs of $432,000, and fixed costs of $108,000. If the company spends $72,000 on a sales promotion
Surething CD Company reports sales of $720,000, variable costs of $432,000, and fixed costs of $108,000. If the company spends $72,000 on a sales promotion campaign, it estimates that sales will be increased by $270,000.
Determine whether the sales promotion campaign should be undertaken using breakeven analysis in dollars (hint: calculate current breakeven point and breakeven with new sales promotion). Provide all calculations.
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