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The following information describes a product expected to be produced and sold by Hadley Company Calculate the following: a. The contribution margin b. The contribution
The following information describes a product expected to be produced and sold by Hadley Company Calculate the following: a. The contribution margin b. The contribution margin ratio c. Break even sales in units. d. Break even sales in dollars. e. Margin of Safety at anticipated sales volume in units f. Margin of Safety at anticipated sales volume in dollars The company has done marketing studies on the product and feel that if they spend an additional $25,000 on advertising they will be able to increase the selling price by 15% and still achieve the anticipated sales Incorporating this information into the facts above, calculate the following: a. Contribution margin b. Contribution margin ratio c. Break even in units d. Break even sales in dollars e. Comment on whether or not this is a good idea. The company would like to achieve an after tax profit of $30,000 If their tax rate is 20%. how many units must they sell in order to achieve their target profit Prove your
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