Totally Tanked, Inc. sells tank tops. The firm is considering making some changes in order to achieve its goal of increasing its profit.If it makes no changes, the company anticipates the following for the coming year. Maria, one of the company’s managers suggests the following: “I think if we cut our price to $17 a tank top, we will increase our sales to 3,700,000 tank tops. I think that will help us achieve our goal” Question: Mr. Big, the CEO, upon hearing Maria’s plan says “This is great! We should go forward with your plan since we will increase sales by 700,000 tank tops.” How would you answer Mr. Big? # of tank tops to be sold 3,000,000 Selling price per tank top $20 Variable expense per tank top $8 Fixed expenses for the year $20,000,000
Totally Tanked, Inc. sells tank tops. The firm is considering making some changes in order to achieve its goal of increasing its profit.If it makes no changes, the company anticipates the following for the coming year.
Maria, one of the company’s managers suggests the following: “I think if we cut our price to $17 a tank top, we will increase our sales to 3,700,000 tank tops. I think that will help us achieve our goal”
Question: Mr. Big, the CEO, upon hearing Maria’s plan says “This is great! We should go forward with your plan since we will increase sales by 700,000 tank tops.” How would you answer Mr. Big?
# of tank tops to be sold 3,000,000
Selling price per tank top $20
Variable expense per tank top $8
Fixed expenses for the year $20,000,000
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