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Problem 2 Data concerning Neuner Corporation's single product appear below: Selling price Variable expenses Contribution margin Per Unit Percent of Sales S220 100% 88 40%
Problem 2 Data concerning Neuner Corporation's single product appear below: Selling price Variable expenses Contribution margin Per Unit Percent of Sales S220 100% 88 40% $132 60% Fixed expenses are $425,000 per month. The company is currently selling 4,000 units per month Required: The marketing manager would like to cut the selling price by $11 and increase the advertising budget by $23,700 per month. The marketing manager predicts that these two changes would increase monthly sales by 400 units. What should be the overall effect on the company's monthly net operating income of this change? How would you be able to justify cutting the selling price of this item with the CEO? If you cannot justify cutting the selling price what would you do differently? Show all work and explain
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