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Question 2 (CVP Analysis) (14 marks) ohan Company's typical yearly production and sale data are as given: The following date is based on the production

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Question 2 (CVP Analysis) (14 marks) ohan Company's typical yearly production and sale data are as given: The following date is based on the production and sale of 6,000 units of their main product. $120.00 per unit Selling price per unit Cost of goods sold: $10.00 per unit $20.00 per unit $10.00 per unit $15.00 per unit Variable Manufacturing Overhead.... $55,00 per unit Gross Profit Margin Operating Costs $12.00 per unit $15.00 per unit $18.00 per unit $45.00 per unit S 20.00 per unit Sales Commissions (10% of Sales). Fixed Administrative Salaries . Income Taxes (40%) Required a) How many units would the company have to produce and sell if they desired an after-tax net income of $108,000? (income tax rate is 40%). Assume that the company is considering a marketing campaign in order to incr sales. The company will incur a fixed advertising expense for this campaign. expected to result in the following changes: ease his is 1. Sales are expected to increase to 9,000 units. 2. All 3, Fixed manufacturing costs are expected to increase by 20%. 4. The company desires an after-tax income of 120,000. variable manufacturing costs are expected to increase by 10%. What is the maximum amount the company should be willing to spend for advertising i order to meet these objectives

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