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Break-even analysis Aquarius Games Inc. has nished a new video game, Triathlon Challenge. Management is now considering its marketing strategies. The following information is available: anticipated sales price per unit Sir'S Variable cost per unit" 545 Anticipated sales volume in units 800.000 Production costs $9,000,000 Anticipated advertising costs 515.000.0013 'TM video game. packaging. and copying casts. Three managers, Haley m Dan Gillespie, and Sally Towers had the following discussion of ways to increase the protability of this new offering: Haley: I think we need to think of some way to increase our protability. Do you have any ideas? Dan: Well, I think the best strategy would be to become aggressive on price. Haley: How aggressive? Dan: If we drop the price to $60 per unit and maintain our advertising budget at $15,000,000, I think we will generate sales of 2,000,000 units. Haley: I think that's the wrong way to go. You're giving too much up on price. Instead, I think we need to follow an aggressive advertising strategy. Dan: How aggressive? Haley: If we increase our advertising to a. total of $20,000,000, we should be able to increase sales volume to 1,200,000 units without any change in price. Dan: I don't think that's reasonable. We'll never cover the increased advertising costs. Sally: If we reduce the anticipated selling price by 10%, we can generate sales of 1,500,000 video games. Although it will increase the cost, we should reward our sales associates with a $3 sales commission for each unit sold. Also, let's nd a way to reduce the production cost to $8,000,000. Which strategy is best: I) Do nothing? 2) Follow the advice of Dan Gitlespt'e? 3) Haley Manategy? 4) 0!" Sally Tower '5 strategy? Prepare each manager's contribution margin income statement below and SH!) WALL WORK. Then, explain which strategy is best Show your work Do Nothing Strategy Sales Variable Cost Contribution Margin Fixed Cost Income from Operations Show your work Dan's Strategy Sales Variable Cost Contribution Margin Fixed Cost Income from Operations Show your work Haley's Strategy Sales Variable Cost Contribution Margin Fixed Cost Income from Operations Show your work Sally's Strategy Sales Variable Cost Contribution Margin Fixed Cost Income from Operations Which strategy is best? Briefly Explain