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Kaiser Industries carries no inventories. Its product is manufactured only when a customer's order is received. It is then shipped immediately after it is made.
Kaiser Industries carries no inventories. Its product is manufactured only when a customer's order is received. It is then shipped immediately after it is made. For its fiscal year ended October 31, 2017, Kaiser's break-even point was $1.39 million. On sales of $1.19 million, its income statement showed a gross profit of $167,000, direct materials cost of $410,000, and direct labor costs of $502,000. The contribution margin was $167,000, and variable manufacturing overhead was $50,000. (a) Calculate the following: Variable selling and administrative expenses. $ Fixed manufacturing overhead. $ 3. Fixed selling and administrative expenses. $ (b) Ignoring your answer to part (a), assume that fixed manufacturing overhead was $100,000 and the fixed selling and administrative expenses were $79,000. The marketing vice president feels that if the company increased its advertising, sales could be increased by 20%. What is the maximum increased advertising cost the company can incur and still report the same income as before the advertising expenditure? Maximum increased advertising expenditure $
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