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Information for Drone On Limited is shown below: Selling price Variable expenses Per Unit $1,900 1,425 Percentage of Sales 100% 75% Contribution margin $ 475

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Information for Drone On Limited is shown below: Selling price Variable expenses Per Unit $1,900 1,425 Percentage of Sales 100% 75% Contribution margin $ 475 25% Total fixed expenses are $72,000 per month, and the company is selling 2,000 drones per month. Required: 1. The marketing manager argues that a $9,000 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 $110 per unit. The marketing manager believes the higher-quality product would increase sales by 25% per month. Should the higher- quality components be used? 2. Refer to the original data. Management is considering using higher-quality components that would increase the variable cost by $110 per unit. The marketing manager believes the higher-quality product would increase sales by 25% per month. Should the higher- quality components be used? Yes No

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