Data for Jim's Landscaping are shown below: Per Unit % of Sales Selling Price $600 100% Variable Expenses $390 65 % Contribution Margin $210 35 %

Fixed Expenses are $500,000 per month and the company is selling 5,000 units per month.

7) The marketing manager believes that a $54,000 increase in the monthly advertising budget would increase monthly sales by 250 units (a 5% increase in sales). Should the advertising budget be increased? Yes or no? SHOW YOUR WORK

8) Jim's Landscaping Operation Manager believes that if they increase the quality of the components that the higher-quality product would increase sales by 10%. The higher quality components will cost an additional $20 per unit. Should the higher quality components be used? SHOW YOUR WORK