Green Corporation is a Laptop Merchandise Company. In the year 2020, its Sales 500 bicycle with...

 

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Green Corporation is a Laptop Merchandise Company. In the year 2020, its Sales 500 bicycle with the price of Tk. 500 per unit. Variable expenses Tk. 300 per unit and fixed expenses Tk. 80,000, whereas profit is Tk. 20,000. The company need to take better decision for the coming year 2021, based on the following alternatives: - a) The Co. can inerease unit sales from 500 to 540 by increasing the monthly advertising budget by Tk. 10,000. b) The Co. can use higher quality raw materials, thus increasing variable costs per unit by Tk. 10, to generate an increase in unit sales from 500 to 580. c) The Co. (1) cuts its selling price Tk. 20 per unit, (2) increases its advertising budget by Tk. 15,000 per month, and (3) inereases sales from 500 to 650 units per month. d) The Co. (1) pays a Tk. 15 sales commission per unit sold instead of paying salespersons flat salaries that currently total Tk. 6,000 per month, and (2) increases unit sales from 500 to 575 units. Requirement: What is the profit impact in every situation and which alternative is best for the company's 2021 sales. Green Corporation is a Laptop Merchandise Company. In the year 2020, its Sales 500 bicycle with the price of Tk. 500 per unit. Variable expenses Tk. 300 per unit and fixed expenses Tk. 80,000, whereas profit is Tk. 20,000. The company need to take better decision for the coming year 2021, based on the following alternatives: - a) The Co. can inerease unit sales from 500 to 540 by increasing the monthly advertising budget by Tk. 10,000. b) The Co. can use higher quality raw materials, thus increasing variable costs per unit by Tk. 10, to generate an increase in unit sales from 500 to 580. c) The Co. (1) cuts its selling price Tk. 20 per unit, (2) increases its advertising budget by Tk. 15,000 per month, and (3) inereases sales from 500 to 650 units per month. d) The Co. (1) pays a Tk. 15 sales commission per unit sold instead of paying salespersons flat salaries that currently total Tk. 6,000 per month, and (2) increases unit sales from 500 to 575 units. Requirement: What is the profit impact in every situation and which alternative is best for the company's 2021 sales.

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