$2$

Given the above information in Q$1,$ Shannon's wants to increase its sales to retailers by $20\%$ in the next year. Management estimates

that the incremental promotion program required to generate sufficient demand to boost sales by $20\%$ will be:

Personal Selling Costs

Consumer Advertising

Trade Promotion

Sales Promotion

$$60,000($exclusive of commission$)$

$$58,831$

$$40,101$

$$25,000$

Shannon's will need to hire an additional salesperson $($paid a salary and commission$)$ and provide some added administrative support.

The salesperson's salary plus administrative support will cost about $$60,000$ per year. The salesperson's commission will be the

equivalent of $$0\mathrm{.}05$ per six$-$pack sold. Unit variable costs, exclusive of the salesperson's commission, are the same as in Q$1.$ The

incremental costs of consumer advertising, trade promotion, and sales promotion necessary to support sales in the new market will be

substantial, as indicated in the table above. How many six$-$packs must be sold to break even on the incremental costs that are

anticipated?