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Stratford Company distributes a lightweight lawn chair that sells for $15 per unit. Variable expenses are $6 per unit, and fixed expenses total $180,000 annually.

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Stratford Company distributes a lightweight lawn chair that sells for $15 per unit. Variable expenses are $6 per unit, and fixed expenses total $180,000 annually. Answer the following independent questions. 5. Refer to the original data and ignore Question 4. 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 expenditures, would increase annual unit sales by 50%. a. What is the net operating income of last year's operations without making suggested changes by the sales manager? ( 10 points) b. What would the net operating income be if sale manger's suggested changes were made? (10 points)

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