Expand or reduce ?
Mandy has a study for contracts at $50,000, of which %7,000 is variable cost of supplies. She is currently charging $20 per test She is thinking of lowering her price by 20% in hopes of rasiign current vol. of 10,000 tests by 15%. If she do, she expects her variable cost per test will go up by 4% As I determine the current and predicted revenues, vaiable costs and total contribution margin and product margin. What do you recommend she do?