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Here is Guernsey Company's budgeted contribution margin income statement for the upcoming year: Sales Variable costs Contribution margin Fixed costs Operating income $600,000 420.000 $180,000

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Here is Guernsey Company's budgeted contribution margin income statement for the upcoming year: Sales Variable costs Contribution margin Fixed costs Operating income $600,000 420.000 $180,000 126,000 $54,000 100% 70% 30% 21% 9% Average operating assets are budgeted at $300,000. Which of the following changes in business conditions will simultaneously increase Guernsey's turnover and reduce its margin? O Guernsey spends $15,000 on an annual advertising campaign that increases sales by 20%. Operating assets remain unchanged At the beginning of the year, Guernsey snizes al loss of $6,000 on the disposition of obsolete inventory that had a book value of $6,000 Through better inventory management, Guernsey reduces its average inventory balance by $24,000. O Guernsey reduces its administrative costs by $4,800 per year by simplifying certain processes to make them more efficient O None of the above

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