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can someone please help solve this and show work? thank you so much 19. A company distributes a product that sells for $50 per unit.
can someone please help solve this and show work? thank you so much
19. A company distributes a product that sells for $50 per unit. Variable expenses are $10 per unit, and fixed expenses total $15,000 annually. Assume that the company sold 4,000 units last year. The sales manager is convinced that a 10% reduction in the selling price, combined with a $30,000 increase in advertising expenditures, would increase annual unit sales by 50%. If these changes were made, by how much would net operating income increase or decrease? a. $20,000 increase b. $16,000 increase c. $12,000 decrease d. $10,000 decrease e. None of the above 20. A company produces toys. The following information is available: Selling price per doll $26.40 Variable costs per $12.00 Current annual sales 80,000 units Current fixed costs $360,000 The sales manager projects that next year a 10% reduction in selling price, combined with an increase of $50,000 in advertising spending would result in an increase of 50% in unit sales. By how much will net income increase if they do so? a) $166,000 b) $157,000 c) $187,600 d) $145,000 e) $209,200Step by Step Solution
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