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CVP Analysis; Profit Planning Horton Manufacturing Inc. (HMI) is suffering from the effects o increased local and global competition for its main product, a lawn mower that is sold in discount stores throughout the United States. The following table shows the results of HMI's operations for 2019: Sales (12,500 units @ $84) Variable costs (12,500 a $63) Contribution margin Fixed costs Operating profit (loss) $ 1,050,000 787,500 $ 262,500 296,100 ($ 33,600) 5. The manager believes that a $60,000 increase in advertising would result in approximately a $200.000 increase in annual sales. If the manager is right, what will be the effect on the company's operating profit or loss? 6. Refer to the original data. The vice president in charge of sales feels that a 10% reduction in price in combination with a $40,000 increase in advertising will cause unit sales to increases by 25%. What effect would this strategy have on operating profit (loss)? 7. Refer to the original data. During the year, HMI saved $5 of unit variable cost per lawn mower by buy ing from a different manufacturer. However, changing the plant machinery to accommodate the new part means an additional $50,000 in fixed costs per year. Was this a wise change? Why or why not