Heather Hudson makes stuffed teddy bears. Recent information for her business follows: Selling price per bear $ 26.00 Total fixed costs per month 1,430.00 Variable cost per bear 10.00 She sells 390 bears this month. Required: Suppose sales increase by 20 percent next month. Calculate the effect that increase will have on her profit.

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Chapter3: Cost-volume-profit Analysis
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Heather Hudson makes stuffed teddy bears. Recent information for her business follows:

Selling price per bear $ 26.00
Total fixed costs per month 1,430.00
Variable cost per bear 10.00

She sells 390 bears this month.

Required:

Suppose sales increase by 20 percent next month. Calculate the effect that increase will have on her profit.

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