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A company makes a product that sells for $80 per unit. Variable expenses are $40.00 per...

A company makes a product that sells for $80 per unit. Variable expenses are $40.00 per unit, and fixed expenses total $180,000 per year. Its operating results for last year were as follows:

Sales $ 2,240,000
Variable expenses 1,120,000
Contribution margin 1,120,000
Fixed expenses 180,000
Net operating income $ 940,000

The company president wants to add new features to the product, which will increase the variable expenses by $1.80 per unit. She thinks that the new features, combined with some increase in marketing spending, would increase this year's sales by 25%. How much could the president increase this year's fixed marketing expense and still earn the same $940,000 net operating income as last year?

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