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Pharoah Orthotics Company distributes a specialized ankle support that sells for $ 4 0 . The company's variable costs are $ 3 0 per unit;

Pharoah Orthotics Company distributes a specialized ankle support that sells for $40. The company's variable costs are $30 per unit; fixed costs total $360000 each year. Calculate contribution margin ration. If sales increase by $57000 per year, by how much should operating income increase? Last year, Pharoah sold 38000 ankle supports. The company's marketing manager is convinced that a 10% reduction in sales price, combined with $48000 increase in advertising. Will result in a 36% increase in sales volume over last year.

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