Current | Proposed | |
Sales | (3000*140)=420,000 | (420,000+21500)=441,500 |
Variable expenses | (3000*91)=273000 | (441500*65%)=$286975 |
Contribution margin | 147,000 | 154,525 |
Fixed expenses | 88000 | (88000+9300)=97300 |
Net operating income | 59000 | 57225 |
Hence Net operating income decreases by=(59000-57225)=$1775
Hene advertising budget should not be increased.
Data for Hermann Corporation are shown below: Selling price Variable expenses Contribution margin Per Unit 140...
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