Data for Whiteworth Ltd. are shown below: Sales price Less: Variable expenses Contribution margin Sales Less: Variable expenses Per Unit $ 80 50 $:30 Contribution margin Less Fixed expenses Net income (loss) Fixed expenses are $25,000 per month, and the company is selling 2,000 units per month. Required: 1-a. The marketing manager argues that a $4,000 increase in the monthly advertising budget would increase monthly sales by $8,000. Show the effect of this change on the net income? Complete the table given below to answer the question. (Negative amounts should be indicated by a minus sign.) Percentage of Sales Current Sales 100 62.5 37,5 Sales With Additional Advertising Budget Difference
Data for Whiteworth Ltd. are shown below: Sales price Less: Variable expenses Contribution margin Sales Less: Variable expenses Per Unit $ 80 50 $:30 Contribution margin Less Fixed expenses Net income (loss) Fixed expenses are $25,000 per month, and the company is selling 2,000 units per month. Required: 1-a. The marketing manager argues that a $4,000 increase in the monthly advertising budget would increase monthly sales by $8,000. Show the effect of this change on the net income? Complete the table given below to answer the question. (Negative amounts should be indicated by a minus sign.) Percentage of Sales Current Sales 100 62.5 37,5 Sales With Additional Advertising Budget Difference
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter16: Cost-volume-profit Analysis
Section: Chapter Questions
Problem 2CE
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