Maurice Tutor

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    Argosy University/ Phoniex University/
    Nov-2005 - Oct-2011

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    Phoniex University
    Oct-2001 - Nov-2016

Category > Management Posted 09 Jul 2017 My Price 9.00

monthly advertising budget

EXERCISE 4–4 Changes in Variable Costs, Fixed Costs, Selling Price, and Volume [LO4]

Data for Moorefield Corporation are shown below:

 

 

Fixed expenses are $65,000 per month, and the company is selling 2,750 units per month.

Required:

1.              The marketing manager argues that a $5,000 increase in the monthly advertising budget would increase monthly sales by $12,000. Should the advertising budget be increased?

2.              Refer to the original data. Management is considering using higher-quality components that would increase the variable cost by $4 per unit. The marketing manager believes the higher-quality product would increase sales by 20% per month. Should the higher-quality components be used?

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Maurice Tutor
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Status NEW Posted 09 Jul 2017 04:07 PM My Price 9.00

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