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Dubai Company has reported the following budget data: Sales........... Selling price............ Variable expense...... Fixed manufacturing expenses....... .150,000 units .........$25 per unit ...........$15 per unit

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Dubai Company has reported the following budget data: Sales........... Selling price............ Variable expense...... Fixed manufacturing expenses....... .150,000 units .........$25 per unit ...........$15 per unit .$800,000 Fixed selling and administrative expenses.......$700,000 An advertising agency claims that an advertising campaign would enable the company to increase its sales by 20%. a. What is the maximum amount that the company can pay for advertising and obtain a net operating income of $200,000? Explain your answer.

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