Borosil Ltd., a manufacturer of quality bowls, has steady growth in sales for the past four years. However, increasing competition has led Mr. Aashish, the president, to believe that an aggressive market campaign will be necessary next year to maintain the companys present growth. To prepare for the next years marketing campaign, the companys controller has prepared and presented Mr. Aashish with the following data for the current year Variable Cost (per Bowl) Direct Material 6.50 Direct Manufacturing Labour 16.00 Variable Overhead (manufacturing, marketing, distribution and customer service 5.00 27.50 Fixed Costs Manufacturing 50,000 Marketing, Distribution and Customer Service 2,20,000 Total fixed Costs 2,70,000 Selling Price Rs.50 Expected Sales, 20000 units Income Tax Rate 40% Required (i) What is the projected net income for the current year (ii) What is the breakeven point in units for the current year (iii) Mr. Aashish has set the revenue target for the next year at level of Rs.11,00,000 (or 22,000 bowls). He believes an additional marketing costs of Rs.22,500 for advertising in the next year, with all other costs remaining constant will be necessary to attain the revenue target. What will be the net income for the next year if an additional Rs.22,500 is spent and the revenue target is met (iv) What will be the breakeven point in revenues for the next year if an additional Rs.22,500 is spent for advertising (v) If the additional Rs.22,500 is spent, what are required next year revenues for net income to equal current years net income (vi) At a sales level of 22,000 units what maximum amount can be spent on advertising if net income of Rs.1,20,000 is desired, next year?