Information for Drone On Limited is shown below:

Per Unit Percentage

of Sales

Selling price $ $1,550100\%$

Variable expenses $93060\%$

Contribution margin $ $62040\%$

Total fixed expenses are $$80,000$ per month, and Drone On Limited is selling $2,600$ drones per month.

Required:

$1.$ The marketing manager argues that a $$8,000$ increase in the monthly budget to prepare webinars would increase monthly sales by $50$ drones. Should the webinar budget be increased?

multiple choice $1$

Yes

No

$2.$ Refer to the original data. Management is considering using higher$-$quality components that would increase the variable cost by $$120$ per unit. The marketing manager believes the higher$-$quality product would increase sales by $20\%$ per month. Should the higher$-$quality components be used?

multiple choice $2$

Yes

No

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