1. Refer to the original data. Assume that the company sold 28,000 units last year. The sales manager is convinced that a 10% reduction in the selling price, combined with a $70,000 increase in advertising expenditure, would cause annual sales in units to increase by 50%.

Would you recommend that the company does as the sales manager suggests?

Background and Content: e As you have studied Cost-Volume-Profit Analysis in BB104, your immediate senior boss has given you the following scenario to submit a report including all necessary calculations and your opinions. e Straford Company sells its Jeans Pant for $15 per unit. Variable costs are $6 per unit, and fixed costs total $180,000