c6 - Question 4: Score 1/2 Brief Exercise 6-4: Changes in...

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Question 4: Score 1/2 Brief Exercise 6-4: Changes in Variable Costs, Fixed Costs, Selling Price, and Volume (LO4) Data for Herron Corporation are shown below: Per Unit Percent of Sales Selling price $ 90 100 % Variable expenses 63 70 Contribution margin $ 27
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30 % Fixed expenses are $30,000 per month and the company is selling 4,300 units per month. Requirement 1: The marketing manager argues that a $8,000 increase in the monthly advertising budget would increase monthly sales by $10,200. Should the advertising budget be increased? Your Answer: Choice Selected Yes Selected No Feedback: The following table shows the effect of the proposed change in the monthly advertising budget: Current Sales Sales with Additional Advertising Budget Difference Sales $ 387,000 $
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397,200 $ 10,200 Variable expenses 270,900 278,040 7,140 Contribution margin 116,100 119,160 3,060 Fixed expenses 30,000 38,000 8,000 Net operating income $ 86,100 $ 81,160 $ ( 4,940 ) Assuming no other important factors need to be considered, the increase in the
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c6 - Question 4: Score 1/2 Brief Exercise 6-4: Changes in...

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