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CleanCo has considerable excess manufacturing capacity. The following data pertain to current sales and profit. Sales per month $140,000 Contribution margin ratio 60% Profit margin

CleanCo has considerable excess manufacturing capacity. The following data pertain to current sales and profit.

Sales per month

$140,000

Contribution margin ratio 60%
Profit margin 10%

CleanCo plans to incur a fixed advertising expense of $12,000 next month to promote lower prices. The price cut will reduce contribution margin ratio to 50%.

Requried: Suppose CleanCo runs the promotion. Calculate the incremental sales revenue that CleanCo needs to maintain the current level of profit (in $).

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