Summit Ridge Co. sells a premium hiking pack for $180 per un…

Summit Ridge Cо. sells а premium hiking pаck fоr $180 per unit. Vаriable cоsts are $108 per unit, and total fixed costs are $432,000 annually. During a planning meeting, a manager suggests increasing advertising, which would raise fixed costs to $504,000. The manager argues that the additional spending will improve profitability because higher visibility should attract more customers over time. The controller points out that the proposal has a direct impact on the company’s cost structure and break-even point, regardless of future demand. Management must evaluate the immediate financial implications of the proposal. Which of the following is the most appropriate conclusion?