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Data concerning Hands Sanitizers Corporation' s single product appear below: Details Per Unit Percent of Sales Selling Price 90$ 100% Variable Expense 72 80% Contribution

Data concerning Hands Sanitizers Corporation's single product appear below:

Details

Per Unit

Percent of Sales

Selling Price

90$

100%

Variable Expense

72

80%

Contribution Margin

18

20%

Fixed expenses are $84,000 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 2,500 unit increase in monthly sales.

  1. What should be the overall effect on the company's monthly net operating income of this change? Show your computations!
  2. What is the breakeven point in dollars and in units if we accept the marketing manager proposal? (according to the new proposal)
  3. If we want to achieve $5,000 net income, how much units should we sell? (according to the new proposal)

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