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I really need this ASAP, I would really appreciate it if you can please do it ASAP Last year, Sill Inc. sold 10,000 units. It
I really need this ASAP, I would really appreciate it if you can please do it ASAP
Last year, Sill Inc. sold 10,000 units. It reported net sales of $600,000 and net operating income of $60,000. Its degree of operating leverage was 4 . What was its total contribution margin? What was its total fixed costs? What was its contribution margin ratio? What was the variable cost per unit? Below are two proposals. Evaluate each proposal independently and select the best course of action. (Hint: compute the net income for each proposal). To earn credit, you must show your work. Proposal 1: The marketing team suggests improving the quality of materials used in production. This will increase the variable cost by $10 per unit. To help cover the increased materials costs, the team proposes to increase the selling price by $4. With an additional $18,000 in advertising, the marketing department thinks that sales could increase to 15,000 units. Proposal 2: Marketing suggests decreasing the unit selling price by 20%. For $7,200, it will run a Best-Deal-in-Town advertising campaign. The manager thinks that with this approach the sales volume will double. What should Sill Inc. do? Should it keep doing what it is doing, or should it adopt one of the proposalsStep by Step Solution
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