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I need help with the following problem please explain the asnwer Problem CleanCo is a successful dry cleaning business in Bangor, Maine. Summary financial data
I need help with the following problem please explain the asnwer
Problem CleanCo is a successful dry cleaning business in Bangor, Maine. Summary financial data for a typical month of operations are as follows: Revenue $30,000 Variable costs (40% of revenue) Contribution margin $18,000 Fixed costs 10.000 profit Because it is the end of winter, management of CleanCo is considering running a special promotion on parkas, comforters, and other winter items. During the month-long promotion management plans to reduce the charge for cleaning each of these bulky winter items from $9 to $6. Management plans to spend $1,000 advertising the promotion in various print media and believes that the promotion will increase the coming month's sales by 1,500 winter items. CleanCo's average monthly revenue on winter items during a typical month equals $4,500. By how much will CleanCo's profit increase or decrease in the coming month if it runs the promotion ?
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