A company makes a product that sells for $80 per unit. Variable expenses are $40.00 per unit, and fixed expenses total $200,000 per year. Its operating results for last year were as follows: Sales $ 2,080,000 Variable expenses 1,040,000 Contribution margin 1,040,000 Fixed expenses 200,000 Net operating income $ 840,000 The company president wants to add new features to the product, which will increase the variable expenses by $1.90 per unit. She thinks that the new features, combined with some increase in marketing spending, would increase this year's sales by 25%. How much could the president increase this year's fixed marketing expense and still earn the same $840,000 net operating income as last year

The president could increase this year's fixed marketing expense and still earn the same $840,000 net operating income as last year if the increase in fixed marketing expense does not exceed in total amount than $198,250.

Explanation:

a) Data and Calculations:

Income Statement         Last Year's         This Year's

Sales                          $ 2,080,000        $2,600,000 ($2,080,000 x 1.25)

Variable expenses        1,040,000             1,361,750 (32,500 x $41.90)

Contribution margin     1,040,000          $1,238,250

Fixed expenses              200,000               398,250 ($198,250)

Net operating income $ 840,000            $840,000

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hi,

henry is an economist and wants to understand the relationship between inflation and consumer spending habits. for his research, he needs the consumer price index for 2014 and the inflation rate. based on the prices of goods given, what will he find to be the cpi and inflation rate for 2014? assume that a consumer’s basket for three consecutive years consists of the following:

you dont privide answer choices.

answer - 15% of a inflatation rate is 15% less in cpi