Question 1 Yousef Ltd manufactures and sells iron gates. The Executive Manager is reviewing the...
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Question 1 Yousef Ltd manufactures and sells iron gates. The Executive Manager is reviewing the budget for the best-selling gates for next year because the company is studying how to maximise operational performance. The original budget provides that the estimated sales will be 80,000 units. With an average price of 50, the total sales will thus be 4,000,000. At this level of sales, the variable costs would be 1,600,000, while fixed costs would be 1,400,000. Eyad Alsaid, the Sales Manager suggests that if the price of the gates is lowered to 40, the sales volume is estimated to maximise by 50%. Naglaa Hassan, Marketing Manager, has a different point of view. She assumes that the best way to maximise the company's sales is to increase the marketing campaign in all of its current markets. She believes that a 20% increase in sales will require an additional marketing campaign at a cost of 200,000. The Board Director requested some figures and financial advice to help determine which of the three strategies would be adopted:
1. Stay with the original budget
2. Adopt Eyads
3. Adopt Naglaas
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