Hi! Can I ask for help?

The financial report submitted by Miss Leonor Santiago, chief accountant of RPI Enterprises, included the following date, among others:

Sales30,000 units

Variable cost ...........................................P 6 per unit

Break-even sales ratio .......................... 75%

Profit ratio ............................................... 10%

Upon reading the report, the company's president, Mr. Diony dela Cruz, commented that the results of operations can be improved if the company will increased its selling price. To justify this increase in selling price, slight modifications will be done in the design of the product. According to him, the product's design can be modified if the company will use a modern equipment that is now available in the local market. Naturally, acquisition pf this modern equipment will mean additional costs for the company, but Mr. dela Cruz is optimistic that the increase in sales due to the increase in selling price will more than cover the incremental cost.

When Miss Santiago made an analysis of Mr. dela Cruz' plan, her study revealed the following:

The increase in selling price will increase the contribution margin ratio to 50%

The only change in cost that will result from the acquisition of a modern equipment is an increase in fixed manufacturing overhead.

Break-even sales will go up to P27,000.

Required: Determine the following, assuming that RPI Enterprises will implement MR. dlea Cruz' proposal:

a.Increase in total sales

b.Increase in fixed cost

c.Expected increase in profit.