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3. Meyers & Sons has the following unit sales and cost data for their best-selling product. Note: The following situations in parts a and bare
3. Meyers & Sons has the following unit sales and cost data for their best-selling product. Note: The following situations in parts a and bare independent of each other. Selling price per unit Variable cost per unit Fixed costs Current units sold $600 $260 $429,600 2,800 units a) Situation A: Meyers & Sons is anticipating a price increase from their suppliers for materials, and instead of raising the selling price of their product, they have purchased additional advertising in an effort to increase their sales. If variable costs increase 10% due to the increased material costs and fixed costs increase by $10,000 due to the additional advertising, what is the new amount of units that they need to sell to break-even? b) Situation B: Meyers & Sons is considering purchasing additional advertising for $15,000 in an effort to be more competitive in the market. What is the change in Net Income the company can expect based on this change in fixed costs, and assuming they are able to increase their sales to 3,400 units sold
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