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Polaris Corporation's price and variable cost per unit are $32 and $14 respectively. Its annual fixed cost of $1.75 million includes depreciation amounting to $350,000.
Polaris Corporation's price and variable cost per unit are $32 and $14 respectively. Its annual fixed cost of $1.75 million includes depreciation amounting to $350,000. a. Compute the contribution margin per unit and contribution margin ratio. b. Assume that Polaris plans to sell 100,000 units in the coming year. Compute the expected margin of safety and degree of operating leverage. c. Polaris' management is planning to reduce the selling price to $30. Management believes that a portion of the marketing costs can be reduced without affecting sales (in units). By how much Polaris afford to reduce its marketing costs without affecting net income
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