Question
The following monthly data are available for the and its only product, Product AJ: Total Per Unit Sales (500 units) $137,500 $ 275 Variable expenses
The following monthly data are available for the and its only product, Product AJ: Total Per Unit Sales (500 units) $137,500 $ 275 Variable expenses 55,000 110 Contribution margin $ 82,500 $ 165 Fixed expenses 52,800 Net income $ 29,700 Required Assume that Challenger Company is currently selling 500 units of Product SW per month. Management wants to increase sales and feels that this can be done by cutting the selling price by $25 per unit and increasing the advertising budget by $25,000 per month. Management believes that these actions will increase unit sales by 50%. Should these changes be made?
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