Clarkson Computer Company distributes a specialized wrist support that sells for $30. The company”s variable costs are $12 per unit; fixed costs total $360,000 a year.

Required

1. If sales increase by $39,000 per year, by how much should operating income increase?
2. Last year, Clarkson sold 32,000 wrist supports. The company”s marketing manager is convinced that a 5% reduction in the sales price, combined with a $50,000 increase in advertising, will result in a 30% increase in sales volume over last year. Should Clarkson implement the price reduction? Why or why not?
3. year. Should Clarkson implement the price reduction? Why or why not?