David wants to be an entrepreneur after his graduation. He is interested in toy manufacturing. After conducting market research, he estimates that his initial investment to buy brand-new toy production equipment will be $30,000; whereas for each toy, he must spend $15 toward toy materials, labor, packaging, and shipping. He plans to produce as many toys as the market demands. He expects that he can sell each toy for $30.
a. How many toys does David need to sell to reach a breakeven?
b. David determines that by spending $9,000 toward advertising through local media, he can increase the sales volume by 500 toys. Should he then spend on advertising?