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Herriot Co

question 96

Essay

Herriot Co. has total fixed costs of $180,000 and a contribution margin ratio of 40%. Assume that an additional advertising expenditure of $4,000 would increase sales by $8,000. Should the company spend this additional amount on advertising? (Support your answer with calculations.)


Definitions:

Guard Cell

One of a pair of epidermal cells that adjust their shape to form a stomatal pore for gas exchange.

Companion Cell

A cell in the phloem of flowering plants that governs loading and unloading sugar into the sieve tube element for translocation.

Stem Apical Meristem

A region at the tip of a plant stem where cells are undifferentiated and capable of division, contributing to the lengthwise growth of the plant.

Lateral Meristems

Plant tissue responsible for growth in thickness or girth in a maturing plant, found in the cambium and producing cells that differentiate into various tissues.

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