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weqwewe [10]
4 years ago
13

A company distributes a product that sells for $50 per unit. Variable expenses are $10 per unit, and fixed expenses total $15,00

0 annually. Assume that the company sold 4,000 units last year. The sales manager is convinced that a 10% reduction in the selling price, combined with a $30,000 increase in advertising expenditures, would increase annual unit sales by 50%. If these changes were made, by how much would net operating income increase or decrease?
Business
1 answer:
Sidana [21]4 years ago
4 0

Answer:

Income will increase by $20,000.

Explanation:

<u>First, we need to calculate the current income:</u>

Current income= 4,000*(50 - 10) - 15,000= $145,000

<u>Now, the new selling price, fixed costs, and sales in units:</u>

Selling price= 50*0.9= $45

Fixed costs= $45,000

Sales= 4,000*1.5= 6,000

New income= 6,000*(45 - 10) - 45,000= $165,000

Difference= 165,000 - 145,000= 20,000

Income will increase by $20,000.

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<h3>What is Iteration Retrospective?</h3>

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The complete question goes thus:

What are two SAFe primary opportunities for driving relentless improvement? (Choose two)

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a. Source documents provide control and reliability in an accounting information system.

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Marina86 [1]

Answer:

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