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Tanner Company's most recent contribution format income statement is presented below. Sales $75,000 Less variable expenses 45,000 Contribution margin 30,000 Less fixed expenses 36,000 Net
Tanner Company's most recent contribution format income statement is presented below. Sales $75,000 Less variable expenses 45,000 Contribution margin 30,000 Less fixed expenses 36,000 Net loss ($6,000) The company sells its only product for $15 per unit. There were no beginning or ending inventories. Required: a. Compute the company's break even point in units sold. b. Compute the total variable expenses at the break even point. How many units would have to be sold to earn a target profit of $9,0002 d. The sales manager is convinced that a $6,000 increase in the advertising budget would increase total sales by $25,000. Would you advise the increased advertising outlay
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