Aurora Lighting sells a specialty fixture for $120 per unit….
Aurora Lighting sells a specialty fixture for $120 per unit. Variable costs are $70 per unit, and fixed costs total $600,000 annually. The company currently sells 15,000 units per year. Management is considering reducing the selling price to $105 in order to increase annual sales volume to 18,000 units. The sales manager strongly supports the proposal, arguing that higher volume will strengthen market presence and improve long-term customer relationships. The controller is concerned about the impact on profitability. Senior management must evaluate both the financial and strategic implications of the proposal. Which of the following is the most appropriate conclusion?
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