Additional amount on advertising


Question: Herriot Company has total fixed costs of $180,000 and a contribution margin ratio of 40%. Assume tht an additional advertising expenditure of $4,000 would increase sales by $8,000. Should the company spend this additional amount on advertising? Explain either a yes or no response and show calculations to support your answer.

Solution Preview :

Prepared by a verified Expert
Accounting Basics: Additional amount on advertising
Reference No:- TGS01892443

Now Priced at $20 (50% Discount)

Recommended (91%)

Rated (4.3/5)