Assume operating expenses last year were. Sales 468000, variable expenses 140400, contribution margin 327600, fixed expenses 168000, net operating income 159600, sells are $18 per unit, and variable cost are $5.4 per unit. Assume that the company sold 35000 units last year. The sales manager is convinced that a 12% reduction in the selling price, combined wiht a $80000 increase in adverstising expenditures, would cause annual sales in units to increase by one-third. I need a new contribution format income statement showing the results.
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