The Food division of Garcia Company reports the following for the current year. $ 4,600,000 3,000,000 1,600,000 1,392,000 Sales Cost of goods sold Gross profit Expenses Income $ 208,000 Garcia wants to achieve at least a 10% profit margin next year. Two alternative strategies are proposed. Strategy 1: Increase advertising expenses by $225,000. The company expects this to increase sales by $800,000. Cost of goods sold will not change. Strategy 2: Develop a more efficient manufacturing process. This will decrease cost of goods sold by $160,000. a. For each strategy, compute the profit margin expected for next year. b. Which strategy should Garcia choose based on expected profit margin?

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