Home Company never advertises. The Ad group, an advertising agency that has been trying to win Home over, claims that an aggressive advertising campaign would increase Home's sales by \(22 \%\). A summary of Home's sales and costs for the year just ended is as follows:

Using this information, determine how much Home could pay for advertising and earn a target profit of \(\$ 300,000\).

Transcribed Image Text:

Units sold Selling price per unit Variable manufacturing costs per unit Fixed costs: Manufacturing overhead Selling and administrative expenses 150,000 $50 $10 $800,000 $700,000