Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Data concerning Hands Sanitizers Corporation' s single product appear below: Details Per Unit Percent of Sales Selling Price 90$ 100% Variable Expense 72 80% Contribution
Data concerning Hands Sanitizers Corporation's single product appear below:
Details | Per Unit | Percent of Sales |
Selling Price | 90$ | 100% |
Variable Expense | 72 | 80% |
Contribution Margin | 18 | 20% |
Fixed expenses are $84,000 per month. The company is currently selling 3,000 units per month. Required: The marketing manager believes that a $10,000 increase in the monthly advertising budget, would result in a 2,500 unit increase in monthly sales.
- What should be the overall effect on the company's monthly net operating income of this change? Show your computations!
- What is the breakeven point in dollars and in units if we accept the marketing manager proposal? (according to the new proposal)
- If we want to achieve $5,000 net income, how much units should we sell? (according to the new proposal)
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started