3-42 CVP, sensitivity analysis. Mundial Nails produces a famous nail polish with a unique glossy feature and sells it for $25 per unit. The operating income for 2017 is as follows: Per unit ($) Total ($) Sales revenue $25 $750,000 Raw materials 5 150,000 Variable manufacturing costs 4 120,000 Other variable costs 6 180,000 Contribution margin 10 300,000 Fixed cost 174,000 Operating income $126,000 Mundial Nails would like to increase its profitability over the next year by at least 20%. To do so, the company is considering the following options: 1. Replacing a portion of its variable labor with an automated machining process. This would result in a 25% decrease in variable manufacturing costs per unit, but a 20% increase in fixed costs. Sales would remain the same. 2. Spending $30,000 on a new advertising campaign, which would increase sales by 20%. 3. Increasing both selling price by $5 per unit and raw material costs by $3 per unit by using a higher- quality raw materials in producing its nail polish. The higher-priced nail polish would cause demand to drop by approximately 20%. 4. Adding a second manufacturing facility that would double Mundial Nails' fixed costs, but would in- crease sales by 60%. Evaluate each of the alternatives considered by Mundial Nails. Do any of the options meet or exceed Mundial's targeted increase in income of 25%? What should Mundial Nails do