According to their analysis:
7) The average selling price is $4.00 per unit in 2022
(Round to nearest unit, dollar, and percentage, where necessary. Use the CVP income statement format in calculating profits.)
What effect would Linda’s plan have on the partnership’s profits and its break-even point in
dollars & in units?
(1) increase the variable selling costs which will then increase the total variable unit cost to $3.00
(2) increase the selling price per unit to $5.25, and
(3) increase fixed selling expenses by $75,000.
Tom also quoted a marketing research report that says market share would increase by 0.50% if these changes were made (According to Tom new market share will be 1.25% after intensive advertising and promotional campaigns).
What effect would Tom’s plan have on the partnership’s profits and its break-even point in dollars & in units?
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