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Blue Spruce Industries carries no inventories. Its product is manufactured only when a customer's order is received. It is then shipped immediately after it is
Blue Spruce Industries carries no inventories. Its product is manufactured only when a customer's order is received. It is then shipped immediately after it is made. For its fiscal year ended October 31, 2017, Blue Spruce's break-even point was $1.70 million. On sales of $1.60 million, its income statement showed a gross profit of $320,000, direct materials cost of $407,000, and direct labor costs of $510,000. The contribution margin was $320,000, and variable manufacturing overhead was $49,000. (a) Calculate the following: (Round intermediate calculations to 2 decimal places e.g. 2.25 and final answers to 0 decimal places, e.g. 1,225.) 1. Variable selling and administrative expenses. 2. Fixed manufacturing overhead. " 3. Fixed selling and administrative expenses. (b) Ignoring your answer to part (a), assume that fixed manufacturing overhead was $102,000 and the fixed selling and administrative expenses were $78,000. The marketing vice president feels that if the company increased its advertising, sales could be increased by 19%. What is the maximum increased advertising cost the company can incur and still report the same income as before the advertising expenditure? Maximum increased advertising expenditure & Click if you would like to Show Work for this question: Onen Show Work
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