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Question 3 10 marks Super Sales Company is the exclusive distributor for a specialized smart watch. The following shows their results for the most recent
Question 3 10 marks Super Sales Company is the exclusive distributor for a specialized smart watch. The following shows their results for the most recent year TOTAL unit sales 1400 Sales $280,000 Variable expenses: Cost of goods sold 50,400 Sales commissions 56,000 Total variable expenses 106,400 Contribution margin 173,600 Fixed expenses: Advertising 42,000 Salaries 24,000 Total fixed expenses 66,000 Operating income $ 107,600 Required: 1 The sales manager is convinced that if all of the following changes are implemented next year, the combined impact on unit sales will be an increase of 50%: (6 marks) i decrease the unit selling price by $15 ii increase the unit sales commission to 25% of unit selling price iii increase the annual sales salaries by $25,000 iv increase the advertising budget by $1,000 per month Calculate the impact on operating income of making all of these changes for the next year. (show calculations)
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