Craylon Manufacturing Produces a Single Product That Sells for $100

question 84

Multiple Choice

Craylon Manufacturing produces a single product that sells for $100.Variable costs per unit equal $25.The company expects total fixed costs to be $60,000 for the next month at the projected sales level of 1,000 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 $10,000 increase in the monthly advertising expense will result in a considerable increase in sales.Sales must increase by ________ to justify this additional expenditure.

• A) 123 units
• B) 134 units
• C) 243 units
• D) 143 units

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Definitions:

Organizational Pressure

The internal or external forces that influence the behaviors, performance, and strategies of an organization.

Complacency Trap

The mistake of being carried along by the flow of events.

Flow Of Events

The sequence and progression of activities or occurrences, often outlined to understand or manage processes or operations.

Ecological Fallacy

The error in reasoning that occurs when assumptions are made about individuals based on aggregate data for a group.