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The sales manager of ZOOL limited is negotiating a deal with a client. The Chief Operating Officer (COO) of the company emphasised that the targeted

The sales manager of ZOOL limited is negotiating a deal with a client. The Chief Operating Officer (COO) of the company emphasised that the targeted profit from the deal should be no less than $500,000. The following are the costing details for the deal: Suggested unit selling price Unit manufacturing variable cost $50 $20 Fixed manufacturing cost for the period $2,000,000 $10 Fixed selling and admin cost for the period Maximum production capacity $1,000,000 800,000 units Unit selling and admin variable cost The customer offers to buy 190,000 units at the price with 5% discount on the suggested selling price. What are the two possible options for the sales manager to counteroffer to achieve the expected profit from the COO, quantify your answer in the two different options? (Hint: Consider one factor at a time i.e. either offer change in price/discount or offer change in quantity). a) Option I b) Option

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