Stratford Company distributes a lightweight lawn chair that sells for $15 per unit. Variable expenses...
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Accounting
Stratford Company distributes a lightweight lawn chair that sells for $15 per unit. Variable expenses are 6.00 a unit, and fixed expenses total 180,000 annually. results from last year are as follows:
Sales(24,000 units)............ 360,000
Variable expenses.............144,000
Contribution margin............216,000
Fixed expenses..................180,000
Operating Income..............36,000
Refer to the original data. The president feels that it would be unwise to change the selling price. instead, she wants to increase the sales commission by $2 per unit. she thinks that this move, combined with some increase in advertising, would increase sales to 48,000 units compared to 24,000 last year. By how much could advertising be increased with profits remaining unchanged? use the incremental analysis method.
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