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What absolute increase in dollar sales volume

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Drake, Inc. manufactures electric welders that it sells to other manufacturers, and sales last year were $45 million. Drake has a 35% contribution margin. The marketing manager has suggested increasing the number of sales representatives by five, which would cause fixed costs to increase by $250,000. Another suggestion is to reduce price by 10%.

What absolute increase in dollar sales volume would be necessary to maintain Drake's current contribution if price was reduced by 10%?

Reference no: EM132042262

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