Listed here are the total costs associated with the production of 1,000 drum sets manufactured by TrueBeat. The drum sets sell for $540 each.

Costs

Plastic for casing$15,000

Wages of assembly workers$90,000

Property taxes on factory$8,000

Accounting staff salaries$42,000

Drum stands (1,000 stands purchased)$38,000

Rent cost of equipment for sales staff$36,000

Upper management salaries$205,000

Annual flat fee for factory maintenance service$20,000

Sales commissions$25 per unit

Machinery depreciation, straight-line$35,000

1. Increase Fixed Costs: TrueBeats management is also considering purchasing additional advertising for $40,000. Marketing studies suggest that sales will increase by 200 units a year. Should the company purchase the additional advertising? Your answer should use complete sentences and contain 30 to 50 words. Support your answer with calculations of at least 2 of the following items. (a) Net Operating Income, (b) Break-even in units or dollars,(c) target sales in units or dollars to maintain the same Net Income as originally assumed for year 4. You may also use other calculations that you feel are relevant.