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You are the senior marketing executive in the newly opened Walnut office and are aggressively looking for new engagements. Your friend, Jonathan, from your college days is a decision maker at a local CPA firm. You are preparing a proposal for a $75,000 marketing and advertising campaign. You have learned from Jonathan that his firm grosses $9,000,000 and has variable costs are staffing 40%, employee burden including benefits 14% and admin costs of 3%. Jonathan is willing to present your proposal at the next Partner meeting but demands a 25% ROI on the Firm's investment.
Question 1: Present your analysis to determine needed increase in revenue to justify your $75,000 fee and your proposed marketing strategy.
The average fixed overhead cost per unit is $0.25. Under the general decision rule, the minimum price per unit for this special order is?
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