Your Company manufactures and sells a single product. The product sells for $1,750 per unit and has a contribution margin of $1,075 per unit. The company's monthly fixed expenses are $467,625. The design specialist wants to replace a component with higher grade material that would increase variable costs by 20%. The sales division feels that if a new advertising campaign costing Sx promoted the new and improved construction, the selling price could be increases by $100. They estimate that the advertising would cost $26,175. If the company desires a monthly net income of $175,000, what are the required sales in DOLLARS.

Your Company manufactures and sells a single product. The product sells for $1,750 per unit and has a contribution margin of $1,075 per unit. The company's monthly fixed expenses are $467,625. The design specialist wants to replace a component with higher grade material that would increase variable costs by 20%. The sales division feels that if a new advertising campaign costing Sx promoted the new and improved construction, the selling price could be increases by $100. They estimate that the advertising would cost $26,175. If the company desires a monthly net income of $175,000, what are the required sales in DOLLARS.

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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