Problem K Surething CD Company reports sales of $720,000, variable costs of $432,000, and fixed costs of $108,000. If the company spends $72,000 on a sales promotion campaign, it estimates that sales will be increased by $270,000.

Determine whether the sales promotion campaign should be undertaken using breakeven analysis in dollars (hint: calculate current breakeven point and breakeven with new sales promotion). Provide all calculations.

4 5 Exercise E Contribution Margin per Unit = 7 BE in units 8 9 10 CM ratio 11 12 13 BE in sales 14 15 16 Should Peter buy the company? Why or why not? 17 18 19 20 Problem K. 21 Current Breakeven in Sales Dollars: 22 23 24 25 New Sales Total = New 20 Problem k 21 Current Breakeven in Sales Dollars: 22 23 24 25 New Sales Total = New 27 New Breakeven w/ Sales Promo: 28 29 30 Analysis: 31 32 34 35 Alternate Problem C 36 1 and 2. Current Level 37 Variable cost per unit = 38 39 Contribution margin per unit 40 41 Breakeven in Units = 45 46 3. Earn income of $144,000