Thomas Company Has Total Fixed Costs of $360,000 and Variable

question 24

Essay

Thomas Company has total fixed costs of $360,000 and variable costs of $14 per unit. If the unit sales price is reduced from $24 to $20 and advertising is increased by $10,000, sales will increase from 40,000 to 65,000 units. Should Thomas reduce its per unit sales price and pay for the additional advertising? (Support your answer with calculations.)

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Definitions:

Uninvolved

A term often referring to a style of parenting or leadership where the caregiver or leader shows low responsiveness and low demand towards dependents.

Coercive

Relating to or using force or threats to persuade someone to do something or to achieve compliance.

Severe Physical Abuse

Intense or extreme forms of physical harm or injury inflicted on an individual, often in a repeated or systematic manner.

Wartime Atrocities

Acts of cruelty and brutality committed during war, often involving the violation of the laws and customs of warfare and human rights.