Armadale company manufactures and sells three video game consoles The Alpha X. the Beta Y and the Gammame systems Information for each product is shown below 4 S Alpha 30.0015 5,000 Beta 50.00 Gamma 100.00 15,000 60.00 5 Sales price 6 Sales volume units) 7 Variable cost per unit 8 Annual traceable fixed expenses 2,500 5 40.005 15,00 50,000 $ 90,000 $ 210,000 $450,000 9 10 Total Fixed Expenses for Armadale Company 11 2 WORKSPACE ONLY: NO MARKS FOR YELLOW AREA 3 Sales Gamma Alpha Beta Total Alpha Beta 23 a. What is the contribution margin ratio of each product line (3 marks): 24 35 Gamma 26 Contribution margin ratio (percentage) 27 28 29 b. What is the segment margin (in dollars) of each product line (3 marks): 30 31 Gamma Alpha Beta 32 Segment margin 35 c. If the company can sell one more unit of product, which system should 36 they sell to maximize income? (1 mark) 27 Beta d. Which segment should be dropped, if any based on quantitative analysis alone? (1 mark) ... Alpha b. Beta c. Gamma d. None, all segments should be kept e. What are the common fixed expenses of the company as a whole? (2 marks) eta PARTE The sales manager of Armadale Company thinks that sales of Beta would increase if they spend funds on an advertising campaign. Assuming his prediction is accurate, calculate the following: (4 marks) 5 50.000 Increase in Beta sales Amount spent on advertising 5 10,000 Increase in income Increase in expenses Net Increase (decrease) in income Would you recommend that the sales manager proceed with the advertising campaign? (Yes or No)