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Hi, can you help me with this question? Thank you. 6. Refer to the original data. Assume again that the company sold 30,000 units last

Hi, can you help me with this question? Thank you.

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6. Refer to the original data. Assume again that the company sold 30,000 units last year. The president feels that it would be unwise to change the selling price. Instead, he wants to increase the sales commission by $5 per unit. He thinks that this move, combined with some increase in advertising, would increase annual unit sales by 50%. By how much could advertising be increased with profits remaining unchanged? Do not prepare an income statement; use the incremental analysis approach. KLEIN COMPANY Contribution Margin Income Statement Last Year Proposed 30,000 units 36,000 units Total Per Unit Total Per Unit Sales $ 900,000 $ 30.00 $ 950,400 $ 26.40 Variable expenses 360,000 12.00 432,000 12.00 Contribution margin 540,000 18.00 518,400 14.40 Fixed expenses 279,000 346,000 Net operating income $ 261,000 $ 172,400

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