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The Food division of Garcia Company reports the following for the current year. Sales $ 4 , 0 0 0 , 0 0 0 Cost
The Food division of Garcia Company reports the following for the current year.
Sales $
Cost of goods sold
Gross profit
Expenses
Income $
Garcia wants to achieve at least a profit margin next year. Two alternative strategies are proposed.
Strategy : Increase advertising expenses by $ The company expects this to increase sales by $ Cost of goods sold will not change.
Strategy : Develop a more efficient manufacturing process. This will decrease cost of goods sold by $
For each strategy, compute the profit margin expected for next year.
Which strategy should Garcia choose based on expected profit margin?
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