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Question 6 5 pts Swiss Company's budget for the upcoming year projects sales revenues of $900,000, an overall contribution margin ratio of 40%, total
Question 6 5 pts Swiss Company's budget for the upcoming year projects sales revenues of $900,000, an overall contribution margin ratio of 40%, total fixed costs of $270,000, and an operating leverage of 4.0. Average operating assets are budgeted at $562,500. Which of the following changes in business conditions would simultaneously increase Swiss Company's turnover and reduce its margin? Through better inventory management, Swiss reduces its average inventory balance by $48,000. Swiss spends $30,000 on an annual advertising campaign that increases sales by 15%. Operating assets remain unchanged. Swiss reduces its administrative costs by $9,600 per year by streamlining certain processes to make them more efficient. At the beginning of the year, Swiss recognizes a book loss of $12,000 on the disposition of obsolete inventory that had a book value of $12,000. None of the above
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