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Cheaney Manufacturing produces a single product that sells for $200. Variable costs per unit equal $50. The company expects total fixed costs to be $120,000 for the next month at the projected sales level of 2,000 units. In an attempt to improve performance, management is considering a number of alternative actions. Each situation is to be evaluated separately.

Suppose that management believes that a $24,000 increase in the monthly advertising expense will result in a considerable increase in sales. Sales must increase by how much to justify this additional expenditure?

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M984506

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