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answer letter D only. thanks Performance Sports {letter D only] page 3T8 to 3?9 Performance Sports produces inatable rafts used for river rafting. Sales have

answer letter D only. thanks

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Performance Sports {letter D only] page 3T8 to 3?9 Performance Sports produces inatable rafts used for river rafting. Sales have grown slowly over the years, and cost increases are causing Performance Sports to incur losses. Financial data for the most recent year are shown Sales 52,600,000 l: 52,000 it 1,300 units) Variable Cost Cost of goods sold 51,040,000 l: 5000 it 1,300 units]: Selling and administrative costs 390,000 l: 5300 x 1,300 units} Total variable costs 51,430,000 Contribution margin $1,110,000 Fixed costs Cost of goods sold $300,000 Selling and administrative costs 000,000 Total xed costs 1,200,000 Operating loss 15mm Members of the management group at Performance Sports arrived at these three possible courses of action to return the company to profitability {each scenario is independent of the others}: 1. Increase the sales price for each raft by 10 percent, which will cause a 5 percent drop in sales volume. Although sales volume will drop 5 percent, the group believes the increased sales price will more than offset the drop in rafts sold. 2. Decrease the sales price for each raft by 10 percent, which will cause an 8 percent increase in sales volume. Although the sales price will drop by 10 percent, the group believes an increase in rafts sold will more than offset the sales price reduction. 3. Increase advertising costs by $200,000, which will increase sales volume by 15 percent. Although fixed selling and administrative costs will increase by $200,000, the group believes the increase in rafts sold will more than offset the increase in advertising costs. Required: d. Calculate the projected operating prot {loss} for the option assigned, and determine whether the option is acceptable

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