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A company makes a product that sells for $120 per unit. Variable expenses are $60.00 per unit, and fixed expenses total $180,000 per year. Its
A company makes a product that sells for $120 per unit. Variable expenses are $60.00 per unit, and fixed expenses total $180,000 per year. Its operating results for last year were as follows: Sales $3,240,000 Variable expenses 1,620,000 Contribution margin 1,620,000 Fixed expenses 180,000 Net operating income $1,440,000 The company president wants to add new features to the product, which will increase the variable expenses by $2.30 per unit. She thinks that the new features, combined with some increase in marketing spending, would increase this year's sales by 25%. How much could the president increase this year's fixed marketing expense and still earn the same $1,440,000 net operating income as last year? (0) $261,900 (0 $491,062 $327,375 $589,275
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