Exercises 5 (6 points) The following information pertains to Torasic Company's budgeted income statement for the month of June: Sales (1,500 units at $300) $450,000 Variable cost 200,000 Contribution margin Fixed cost Net loss 250,000 280,000 $(30,000) Required a) Determine the company's breakeven point in both units and dollars. b) The sales manager believes that a $25,000 increase in the monthly advertising expenses will result in a considerable increase in sales. How much of an increase in sales must result from increased advertising in order to break even on the additional monthly expenditure? c) The sales manager believes that an advertising expenditure increase of $25,000 coupled with a 12% reduction in the selling price will double the sales quantity. Determine the net income (or loss) if the company adopts these proposed changes.

Exercises 5 (6 points) The following information pertains to Torasic Company's budgeted income statement for the month of June: Required a) Determine the company's breakeven point in both units and dollars. b) The sales manager believes that a $25,000 increase in the monthly advertising expenses will result in a considerable increase in sales. How much of an increase in sales must result from increased advertising in order to break even on the additional monthly expenditure? c) The sales manager believes that an advertising expenditure increase of $25,000 coupled with a 12% reduction in the selling price will double the sales quantity. Determine the net income (or loss) if the company adopts these proposed changes