Question: The McPherson Company is facing an increase in the variable cost of producing and selling one of its products for the upcoming year. The sales

The McPherson Company is facing an increase in the variable cost of producing and selling one of its products for the upcoming year. The sales manager has proposed to increase the selling price of the product and the advertising budget at the same time. The following information represents the current year results and the proposal made by the sales manager:

\

table

[[,

Current Year Proposal,

], [

Unit sales,

27, 000, 18, 000], [

Sales price per unit,$

48,

58

The McPherson Company is facing an increase in

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