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26 August, 21:54

Requirement 3. The company marketing vice president believes a new sales promotion that costs $ 140 comma 000 would increase sales to 220 comma 000 goggles. Should the company go ahead with the promotion? Give your reason. Use the contribution margin income statement format to evaluate the sales promotion. Increase in contribution margin Increase in fixed expenses Increase in operating income

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  1. 26 August, 22:42
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    Revenue = 240000*49 = 11,760,000

    Variable manufacturing expense = 240000*20 = 4,800,000

    Sales commission expense = 240000*8 = 1,920,000

    Fixed manufacturing overhead = $2,400,000

    Fixed operating expenses = 245,000

    Sales promotion = 140000

    Profit = 2,255,000
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