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Horton Manufacturing Incorporated (HMI) is suffering from the effects of increased local and global competition...

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Accounting

Horton Manufacturing Incorporated (HMI) is suffering from the effects of increased local and global competition for its main product, a lawn mower that is sold in discount stores throughout the United States. The following table shows the results of HMIs operations for 2019:
Sales (15,500 units @ $84) $ 1,302,000
Variable costs (15,500 @ $63)976,500
Contribution margin $ 325,500
Fixed costs 359,100
Operating profit (loss) $ (33,600)
Required:
Refer to the original data. The vice president in charge of sales feels that a 10% reduction in price in combination with a $54,000 increase in advertising will cause unit sales to increases by 25%. What effect would this strategy have on operating profit (loss)?

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