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A company makes a product that sells for $40 per unt. Variable expenses are $20.00 per unit, and fixed expenses total $200,000 per year. Its
A company makes a product that sells for $40 per unt. Variable expenses are $20.00 per unit, and fixed expenses total $200,000 per year. Its operating results for last year were as follows: Sales $1,000,000 Variable expenses 500,000 Contribution margin 500,000 Fixed expenses 200,000 Net operating income $ 300,000 The company president wants to add new features to the product, which will increase the variable expenses by $2.10 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 feed marketing expense and still earn the same $300,000 net operating income as last year
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