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Selling price Variable expenses Contribution margin Percent of Per Unit Sales $ 90 63 100% 70 $ 27 30% Fixed expenses are $30,000 per
Selling price Variable expenses Contribution margin Percent of Per Unit Sales $ 90 63 100% 70 $ 27 30% Fixed expenses are $30,000 per month and the company is selling 2,000 units per month. Required: 1-a. How much will net operating income increase (decrease) per month if the monthly advertising budget increases by $5,000, the monthly sales volume increases by 100 units, and the total monthly sales increase by $9,000? 1-b. Should the advertising budget be increased?
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ANSWER Lets break down the problem step by step Given data Selling price per unit 90 Variable expenses per unit 63 Fixed expenses per month 30000 Curr...Get Instant Access to Expert-Tailored Solutions
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