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Compute amount by which advertising campaign must increase

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Reference no: EM133048135

Question - Chaps & Saddles, a retailer of tack and Western apparel, earns an average contribution margin of 30 percent on its sales volume. Recently, the advertising manager of a local country radio station offered to run numerous radio advertisements for Chaps & Saddles at a monthly cost of $2,100.

a. Compute the amount by which the proposed radio advertising campaign must increase Chaps & Saddles's monthly sales volume to pay for itself.

b. Compute the amount by which the proposed radio advertising campaign must increase Chaps & Saddles's monthly sales volume to increase operating income by $1,500 per month.

Reference no: EM133048135

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