How many additional sales dollars must be produced to cover


The price and prmotion alternatives recommended for the two products by their respective brand managers included the possibility of using additional promotion or a price reduction to stimulate sales volume. A volume, price and cost summary for the two products as follows: Unit Price $2.00-$1.00, Unit variable costs 1.40-0.25, Unit contribution $0.60-$0.75, Unit volume,1,000,000 units-1,500,000 units. Both brand managers included a recommendation to eiher reduce price by 10 percent or invest an incremental $150,000 in advertising. What absolut increase in nit sales and dollar sales will be necessary to recoup the incremental increase in advertising expenditures for Rash-Away and Red-Away, how many additional sales dollars must be produced to cover each $1.00 of inremental advertising and the total contribution dollars if the price of product is reduced by 10 percent?

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Finance Basics: How many additional sales dollars must be produced to cover
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