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XYZ Company manufactures a single product that it sells for $30 per unit. The direct material and direct labor cost is $14 per unit. The
XYZ Company manufactures a single product that it sells for $30 per unit. The direct material and direct labor cost is $14 per unit. The only other cost XYZ Company incurs is a monthly overhead cost. Provided below is information about this product and the monthly overhead cost for the past six months: Month February March April May June July Units Sold 26,380 21,730 22,090 26,810 24,350 23,470 Overhead Cost $274,310 $237,840 $241,070 $278,480 $259,320 $250,960 XYZ Company is planning on launching a new advertising campaign in the month of August. The advertising will cost $12,000 plus 3% of the sales for August. It is expected that 30,000 units of this product will be sold in August as a result of the new advertising campaign. Using the high-low method, calculate XYZ Company's expected contribution margin in August.
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