The following information pertains to Torasic Company's budgeted income statement for the month of June 2006:

Required

a. Determine the company's breakeven point in both units and dollars.

b. The sales manager believes that a \(\$ 22,500\) increase in the monthly advertising expenses will result in a considerable increase in sales. How much of an increase in sales must result from increased advertising in order to break even on the monthly expenditure?

c. The sales manager believes that an advertising expenditure increase of \(\$ 22,500\) coupled with a \(10 \%\) reduction in the selling price will double the sales quantity. Determine the net income (or loss) if these proposed changes are adopted.

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Sales (1,200 units at $250) $300,000 Variable cost Contribution margin Fixed cost Net loss 150,000 $150,000 200,000 ($50,000)