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Oriole Orthotics Company distributes a specialized ankle support that sells for $ 3 0 . The company s variable costs are $ 2 0 per

Oriole Orthotics Company distributes a specialized ankle support that sells for $30. The companys variable costs are $20 per unit; fixed costs total $370,000 each year. Calculate the contribution margin ratio. If sales increase by $65,000 per year, by how much should operating income increase? Last year, Oriole sold 42,000 ankle supports. The companys marketing manager is convinced that a 10% reduction in the sales price, combined with a $47,000 increase in advertising, will result in a 30% increase in sales volume over last year. Should Oriole implement the price reduction? Oriole SHOULD/SHOULD NOT implement the price reduction because the estimated operating income is LESS/MORE than the current operating income

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