OTHC Company produces and sells three products. Information about these products for the month of July...
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OTHC Company produces and sells three products. Information about these products for the month of July is given below: selling price per unit variable costs per unit number of units sold selling price per unit variable costs per unit number of units sold Product L $40 $14 31,400 Product Z $33 $17 22,900 Product V $26 $12 27,100 OTHC Company had total fixed costs of $684,000 in July. OTHC Company is considering investing in an advertising campaign that will double the sales volume of Product Z. It is the goal of the company to increase the net income in August by 20% over the net income from July. Assume the sales of Product V are expected to decrease by 15% as some customers currently buying Product V will switch to Product Z instead. Assume the sales of Product L will not be impacted by the advertising campaign Calculate the maximum amount that can be spent on the advertising campaign and still enable OTHC Company to meet its profit goal for August. OTHC Company produces and sells three products. Information about these products for the month of July is given below: selling price per unit variable costs per unit number of units sold selling price per unit variable costs per unit number of units sold Product L $40 $14 31,400 Product Z $33 $17 22,900 Product V $26 $12 27,100 OTHC Company had total fixed costs of $684,000 in July. OTHC Company is considering investing in an advertising campaign that will double the sales volume of Product Z. It is the goal of the company to increase the net income in August by 20% over the net income from July. Assume the sales of Product V are expected to decrease by 15% as some customers currently buying Product V will switch to Product Z instead. Assume the sales of Product L will not be impacted by the advertising campaign Calculate the maximum amount that can be spent on the advertising campaign and still enable OTHC Company to meet its profit goal for August.
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Answer rating: 100% (QA)
July Net profit Product L Product V Product Z Total Sales 1256000 704600 755700 2716300 Less variabl... View the full answer
Related Book For
Managerial accounting
ISBN: 978-0471467854
1st edition
Authors: ramji balakrishnan, k. s i varamakrishnan, Geoffrey b. sprin
Posted Date:
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