L&M Manufacturing produces a single product that sells for $16. Variable (flexible) costs per unit...
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Accounting
L&M
Manufacturing produces a single product that sells for $16. Variable (flexible) costs per unit equal $11.20. The company expects the total fixed
(capacityminusrelated)
costs to be $7,200 for the next month at the projected sales level of 20,000 units. In an attempt to improve performance, management is considering a number of alternative actions. Each situation is to be evaluated separately.
Suppose that L&M Manufacturing's management believes that a $1,600 increase in the monthly advertising expense will result in a considerable increase in sales. How much must sales increase in a month to justify this additional expenditure?
A.
334 units
B.
200 units
C.
500 units
D.
None of the above is correct.
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