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A-Plus Shed, Inc., manufactures and sells a do-it-yourself storage shed kit. In 2012, it reported the following: Units produced and sold 4,000 Investment $ 2,300,000
A-Plus Shed, Inc., manufactures and sells a do-it-yourself storage shed kit. In 2012, it reported the following: Units produced and sold 4,000 Investment $ 2,300,000 Markup percentage on full cost Rate of return on investment 20% Variable cost per unit $ 500 5% 1. What was A-Plus Shed's operating income in 2012? What was the full cost per unit? What was the selling price? What was the percentage markup on variable cost? 2. A-Plus Shed is considering increasing the annual spending on advertising by $110,000. The managers believe that the investment will translate into a 15% increase in unit sales. Should the company make the investment? Show your calculations. 3. Refer back to the original data. In 2013, A-Plus Shed believes that it will only be able to sell 3,500 units at the price calculated in requirement 1. Management has identified $100,000 in fixed cost that can be eliminated. If A-Plus Shed wants to maintain an 5% markup on full cost, what is the target variable cost per unit
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