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U Question 3 5 pts Here is Guemsey Company's budgeted contribution margin income statement for the upcoming year: Sales 5600,000 100% Variable costs 420,000 7096
U Question 3 5 pts Here is Guemsey Company's budgeted contribution margin income statement for the upcoming year: Sales 5600,000 100% Variable costs 420,000 7096 Contribution margin $180,000 30% Fixed costs 126,000 2196 Operating income $54,000 9% Average operating assets are budgeted at $300,000. Which of the following changes in business conditions will simultaneously increase Guernsey's turnover and reduce its margin? O Guernsey spends $15.000 on an annual advertising campaign that increases sales by 20%. Operating assets remain unchanged O Al the beginning of the year, Guernsey recognizes a book loss of S6,000 on the disposition of obsolete inventory that had a book value of $6,000 Through better inventory management, Guemsey reduces its average inventory balance by 524.000. At the beginning of the year, Guernsey uses $30,000 of cash to repurchase some of its common stock Operating income remains unchanged. Guernsey reduces its administrative costs by $4.800 per year by streamlining certain processes to make them more efficient
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