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Consider the following data for Jasmine & Aladdin Carpets Inc. Per Unit Percent Sales Price $250 100 Less: variable costs 150 60 Contribution margin 100
Consider the following data for Jasmine & Aladdin Carpets Inc. Per Unit Percent Sales Price $250 100 Less: variable costs 150 60 Contribution margin 100 40 Fixed costs $35,000 Currently sales are $100,000 (400 units). Required: The following 3 situations are independent of one another. ALL CALCULATIONS MUST BE SHOWN 1) Management is considering increasing the quality of its carpets at an additional cost of $10 per carpet. They feel that this will increase sales by 80 carpets. Should Aladdin increase the quality of their carpets? 2) The workforce has approached Aladdin to change them from a flat salary of $6000 per month to a sales commission of $15 per carpet which could increase sales by 15%. Should Aladdin agree with their proposal
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