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Information for Drone On Limited is shown below: Selling price Variable expenses Contribution margin Per Unit Percentage of Sales $1,750 100% 1,050 60% $ 700

Information for Drone On Limited is shown below: Selling price Variable expenses Contribution margin Per Unit Percentage of Sales $1,750 100% 1,050 60% $ 700 40% Total fixed expenses are $98,000 per month, and Drone On Limited is selling 1,500 drones per month. Required: 1. The marketing manager argues that a $9,500 increase in the monthly budget to prepare webinars would increase monthly sales by 50 drones. Should the webinar budget be increased? Yes No 2. Refer to the original data. Management is considering using higher-quality components that would increase the variable cost by $170 per unit. The marketing manager believes the higher-quality product would increase sales by 30% per month. Should the higher- quality components be used? Yes No

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