Question
. XYZ Manufacturing produces a single product that sells for $180. Variable costs per unit equal $110. The company expects total fixed costs to be
. XYZ Manufacturing produces a single product that sells for $180. Variable costs per unit equal $110. The company expects total fixed costs to be $350,000 for next year at the current sales level of 10,000 units. In an attempt to improve performance, management is considering the following alternative:
Suppose management believes that a $140,000 increase in Advertising, a fixed cost, will result in a considerable increase in sales. What is the minimum increase in sales (units sold) that XYZ Manufacturing would need?
a. 1,400 units c. 1,800 units
b. 1,600 units d. 2,000 units
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