Sales 9,000@100/unit 900,000

less variable cost 9,000@60 unit 540,000

contribution margin 360,00

less fixed costs 400,000

net operating loss (40,000)

find the breakeven point and the contribution margin ratio

The vice president of sales says there is a 10 percent reduction in selling price with a 30,000 increase in advertising with cause sales volume to increase by 50% What effect would this strategy have on operating income of company