Question
Data concerning Face Masks Corporation' s single product appear below: Details Per Unit Percent of Sales Selling Price 180$ 100% Variable Expense 144 80% Contribution
Data concerning Face Masks Corporation's single product appear below:
| Details | Per Unit | Percent of Sales |
| Selling Price | 180$ | 100% |
| Variable Expense | 144 | 80% |
| Contribution Margin | 36 | 20% |
Fixed expenses are $162,000 per month. The company is currently selling 3,000 units per month. Required: The marketing manager believes that a $10,000 increase in the monthly advertising budget would result in a 480 unit increase in monthly sales.
- What should be the overall effect on the company's monthly net operating income of this change? Show your computations!
- What is the breakeven point in dollars and in units if we accept the marketing manager proposal?
Requirement 1:
| Details | Before marketing manager proposal | After marketing manager proposal |
| Sales |
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| Variable expenses |
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| Contribution margin |
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| Fixed expenses |
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| Net income |
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| Decision |
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Requirement 2:
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