*******Sunland (should / should not) implement the price reduction because the estimated operating income is (less / more) than the current operating income

Exercise 3-11 Sunland Orthotics Company distributes specialized ankle support that sells for $45. The company's variable costs are $31.50 per unit; fixed costs total $370,000 each year. Calculate contribution margin ratio. (Round ratio to 2 percentage places, e.g. 0.38 = 38%.) Contribution margin ratio % If sales increase by $52,000 per year, by how much should operating income increase? (Use the rounded contribution margin ratio calculated in the previous part.) Change in operating income $ Last year, Sunland sold 34,000 ankle supports. The company's marketing manager is convinced that a 10% reduction in the sales price, combined with a $45,000 increase in advertising, will result in a 28% increase in sales volume over last year. Compute the projected income. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).) Projected income $ Should Sunland implement the price reduction? Sunland implement the price reduction because the estimated operating income is than the current operating income. Click if you would like to Show Work for this question: Open Show Work