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Today is December 10. The marketing manager has asked her division head whether she can reduce the selling price of product XYZ $15.00/unit to...
1.Today is December 10. The marketing manager has asked her division head whether she can reduce the selling price of product XYZ $15.00/unit to $11.00/unit for the rest of the month of December. Cutting the price will increase sales for the rest of the month by 5,000 units from 17,000 units to 22,000 units, but will cannibalize some January sales: the December-only price cut will reduce January sales by 3,000 units. The variable costs of manufacturing and selling XYZ are $8.00/unit. Fixed costs are $5,000 for December, but will rise to $6,500 in January.The operating profit for December and January combined will be greater ifA.
