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Answer properly and fast Data for Essence Corporation are given below: Per unit Percent of sales Selling price...... Tk.250 100% Variable expenses.. 200 80% Contribution
Answer properly and fast
Data for Essence Corporation are given below: Per unit Percent of sales Selling price...... Tk.250 100% Variable expenses.. 200 80% Contribution margin..... Tk.50 20% Fixed expenses are Tk.25,000 per month and the company is selling 600 units per month i) The sales manager feels that a Tk. 10,000 increase in the monthly advertising budget would increase monthly sales by Tk. 30,000 to a total of 720 units. Should the advertising budget be increased? ii) Refer to the original data. The management is considering the use of higher quality components, which would increase variable costs by Tk. 10 per speaker. However, the sales manager predicts that using higher quality components would increase sales to 680 speakers per month. Should the higher quality components be used? iii) Refer to the company's original data. The sales manager would like to pay salespersons a sales commission of Tk. 15 per unit sold, rather than the flat salaries that now total Tk.5,000 per month. The sales manager is confident that the change would increase monthly sales by 15 per month. Should the change be made Step by Step Solution
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