Kenneth, the owner of a local poster shop, comes to you for help. "We've only been breaking even the past two years, and I$\text{'}$m $($a$)$

Analyze each of the proposals against the current situation to determine if it will help Kenneth achieve his profit goal.

$($Enter loss using either a negative sign preceding the number e$.$g$.-45$ or parentheses e$.$g$.(45).$ Round answers to $2$ decimal places,

e$.$g$.5,125\mathrm{.}25.)$

Operating Income

Option $1,$$

Option $2,$$

Option $3,$$

Option $4,$$

getting very frustrated! I don't know what to do because I feel like I've already tried to improve our processes as much as

possible, but we still haven't been able to generate a profit. Do you have any suggestions as to how we can turn things around?

I just don't think we can even consider moving forward with this business unless we can earn $$8,000$ in operating income next

year. Even then, we'll have to think long and hard about what the future holds."

Kenneth shares the following information with you, as you ponder different scenarios to help your friend.

After thinking about it for a while, you suggest the following possibilities to help him turn things around.

Lower the selling price by $10\%$ to increase sales volume by $5\%.$

Advertise on the radio and with social media, for a combined cost of $$1,000,$ to increase volume by $10\%.$

Use a more affordable paper on which to print the posters $($available for $$0\mathrm{.}60$ per unit$),$ in combination with a less$-$

expensive film to cover the top of the poster $($available for $$0\mathrm{.}40$ per unit$).$

Instead of paying the salespeople a fixed salary, move to a commission$-$based compensation plan $($save $$20,000$ in

salary; incur $$1\mathrm{.}60$ per unit sold commission$),$ which should increase sales volume by $20\%.$

Analyze each of the proposals against the current situation to determine if it will help Kenneth achieve his profit goal. List operating income loss or growth for each option.