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The Dessert Delights Candy Company produces a single product a chocolate almond bar that sells for $0.50 per bar. The variable costs for each bar (sugar, chocolate, almonds, wrapper, and labor) total $0.20. The total monthly fixed costs are $90,000. Last month, bar sales reached 1.3 million. However, the president of Dessert Delights Candy Company was not satisfied with its performance and is considering the following options to increase the company's profitability. 1. Increase advertising. 2. Increase the quality of the bar's ingredients and simultaneously increase the selling price. 3. Increase the selling price with no change in ingredients Read the requirements. Requirements Requirement (a) The sales manager is confident that an intensive advertising campaign will double sales Requirements last month's, what is the maximum amount that can be spent on advertising that doubles sales volume? (a) The sales manager is confident that an intensive advertising campaign will double sales volume. If the company president's goal is to increase this month's Enter the formula you will use to solve for maximum amount that can be spent on advertising in the curren profits by 50% over last month's, what is the maximum amount that can be spent on advertising that doubles sales volume? (b) Assume that the company increases the quality of its ingredients, thus increasing variable costs to $0.30 per bar. By how much must the selling price per unit be Now calculate the amount that can be spent on advertising by solving for the unknown advertising costs. increased to maintain the same breakeven point in units? The maximum amount that can be spent on advertising is $ (c) Assume next that the company has decided to increase its selling price to 0.60 per bar with no change in advertising or ingredients. Compute the sales volume in units that would be needed at the new price for the company to earn the same Requirement (b) Assume that the company increases the quality of its ingredients, thus increasing variab profit as it earned last month. the same breakeven point in units? Begin by calculating the breakeven point with the original variable costs. First enter the formula, then calc Breakeven units Print Done