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I need help please with the following questions. Thanks. Software Solutions, Inc., was started by two young software engineers to market SpamBlocker, a software application
I need help please with the following questions. Thanks.
Software Solutions, Inc., was started by two young software engineers to market SpamBlocker, a software application they had written that screens incoming e-mail messages and eliminates unsolicited mass mailings. Sales of the software have been good at 20,600 units a month, but the company has been losing money as shown below: Sales (20,600 units x $19.03 per unit) Variable cost (20,600 units x $5.7 per unit) Contribution margin Fixed expenses Net operating loss 392,018 117,420 274,598 282,900 (8,302) The company's only variable cost is the $5.70 fee it pays to another company to reproduce the software on CDs, print manuals, and package the result in an attractive box for sale to consumers. Monthly fixed selling and administrative expenses are $282,900. The company's marketing manager has been arguing for some time that the software is priced too high. She estimates that every 10% decrease in price will yield a 20% increase in unit sales. The marketing manager would like your help in preparing a presentation to the company's owners concerning the pricing Issue. Required: 1. To help the marketing manager prepare for her presentation, she has asked you to fill in the blanks in the following table. The selling prices in the table were computed by successively decreasing the selling price by 10%. The estimated unit sales were computed by successively increasing the unit sales by 20%. For example, $17.13 is 10% less than $19.03 and 24,720 units are 20% more than 20,600 units. (Enter Operating losses preceded by a minus sign. Round your answers to the nearest whole dollar amount.)
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