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The company sells an average of 600,000 pack a year. $ 1.00 0.30 Selling price per bottle Costs vary per bottle Fixed cost: Salary Rent
The company sells an average of 600,000 pack a year. $ 1.00 0.30 Selling price per bottle Costs vary per bottle Fixed cost: Salary Rent a building Advertising Depreciation of equipment Others 50,000 32,000 100,000 32,000 66,000 a) Break even point (in pack) and percentage of safety margin. b) Pack does the company sell to make profit of $ 28,000. c) Increase in advertisement spending of $ 10,000 will cause an increase in 10% of pack sold. Would you suggest an addition to those advertising spend? Prove your answer. d) Prove your answer if there is change in production process, reduce variable cost per pack by $ 0.05, and increase fixed cost by $ 20,000. Sales level of 600,000 pack, would you suggest this change
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