Question 1 Heren Gems Company's budgeted contribution margin income statement for the upcoming Variable costs Contribution margin Fixed cost Operating income $600,000 420.000 $180,000 126,000 554.000 100% 70% 3078 2196 99 Average operating assets are budgeted at $300,000. Which of the following changes in business conditions will simultaneously increase Guernsey's turnover and reduce its margin? Guspends $15,000 on an annual advertising campaign that increases sales by 20% Operating sites remain unchanged At the beginning of the year, Guernsey recognizes a book loss of $6,000 on the disposition of bulete Inventory that had a book value of $6,000 Through better inventory management, Guernsey reduces its average inventory balance by $24.000. At the beginning of the year, Guernsey uses $30,000 of cash to repurchase some of its common stock Operating income remains unchanged. Guernsey reduces its administrative costs by $4,800 per year by streamlining certain processes to make them more efficient