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Following is the last year data of X company: Selling price Variable expenses Fixed expenses for the year S80 per unit $40 per unit $180,000 The company sold 45,000-unit last year. Managers of X company believes that the sales can be doubled when expenditure on advertising is increased by $1.50 per unit, keeping the selling price same as last year. Determine the amount by which advertising can be increased with profits remaining unchanged? a. $1,665,000 b. $1,800,000 c. $1,500,000 d. $1,660,000

Following is the last year data of X company: Selling price Variable expenses Fixed expenses for the year S80 per unit $40 per unit $180,000 The company sold 45,000-unit last year. Managers of X company believes that the sales can be doubled when expenditure on advertising is increased by $1.50 per unit, keeping the selling price same as last year. Determine the amount by which advertising can be increased with profits remaining unchanged? a. $1,665,000 b. $1,800,000 c. $1,500,000 d. $1,660,000

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Following is the last year data of X company: Selling price Variable expenses Fixed expenses for the year S80 per unit $40 per unit S180,000 The company sold 45,000-unit last year. Managers of X company believes that the sales can be doubled when expenditure on advertising is increased by $1.50 per unit, keeping the selling price same as last year. Determine the amount by which advertising can be increased with profits remaining unchanged? a. $1,665,000 b. $1,800,000 c. $1,500,000 d. $1,660,000
Transcribed Image Text:Following is the last year data of X company: Selling price Variable expenses Fixed expenses for the year S80 per unit $40 per unit S180,000 The company sold 45,000-unit last year. Managers of X company believes that the sales can be doubled when expenditure on advertising is increased by $1.50 per unit, keeping the selling price same as last year. Determine the amount by which advertising can be increased with profits remaining unchanged? a. $1,665,000 b. $1,800,000 c. $1,500,000 d. $1,660,000
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