Question

question mode multiple choice question a company is currently selling 10,000 units of product for $40 per unit. the unit contribution margin is $27. the company believes that spending $50,000 on advertising will increase sales by 750 units per month and enable them to increase the selling price to $45 per unit. if this change is implemented, profits will blank . multiple choice question. increase by $3,750 decrease by $29,750 increase by $74,000 increase by $24,000

Answer 1

9,500 units will have to be sold to earn $100,000 per year.

Step by step:

($174,000 + $30,000 + $100,000)/($27 + $5 increase in sales price) = 9,500

The answer is 9500 units.

The contribution margin is calculated as sales - Variable costs. The contribution margin ratio is calculated as (revenue - Variable charges) / sales.

The contribution margin ratio is the difference between a company's sales and variable fees, expressed as a percentage.

The full margin generated through an entity represents the total income to be had to pay for constant costs and generate an income.

When a company sells one unit above the wide variety required to break even, the company's net running profits will: exchange from 0 to net operating earnings.

Learn more about contribution margin here: brainly.com/question/28090857

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