The Marketing Manager has proposed that Sunset Bass Ltd. expand its business by offering saxophone repair...

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The Marketing Manager has proposed that Sunset Bass Ltd. expand its business by offering saxophone repair services in addition to selling saxophones to dealers. The Marketing Manager provided the following estimates for the first year of this new service: Harmony Melody Price for repair services 100 200 Cost of repair materials 30 50 Sales Volume 240 95 The additional fixed costs for the repair services are estimated at 25,000. The existing sales staff will continue to sell saxophones to dealers and are not impacted with the new repair services. Required: c) Calculate the additional profit which this proposal will generate. (8 marks) d) Consider both the positive and negative effects of this proposal and briefly comment on the non-financial effects of proceeding with this proposal. (4 marks) The Marketing Manager has proposed that Sunset Bass Ltd. expand its business by offering saxophone repair services in addition to selling saxophones to dealers. The Marketing Manager provided the following estimates for the first year of this new service: Harmony Melody Price for repair services 100 200 Cost of repair materials 30 50 Sales Volume 240 95 The additional fixed costs for the repair services are estimated at 25,000. The existing sales staff will continue to sell saxophones to dealers and are not impacted with the new repair services. Required: c) Calculate the additional profit which this proposal will generate. (8 marks) d) Consider both the positive and negative effects of this proposal and briefly comment on the non-financial effects of proceeding with this proposal. (4 marks)