Oren Ltd manufactures and sells 3 products with the following selling prices and variable costs:

per unit	Product A	Product B	Product C
Selling price	3.00	2.45	4.00
Variable cost	1.20	1.67	2.60

Currently, the sales per year is as follows:

Product A	500,000 units	25%
Product B	1,100,000 units	54%
Product C	400,000 units	21%

Management is considering an advertising boost from Product A which, with a reduction in the selling price, will increase sales of Product A. If 60,000 was to be spent on the advertising, sales of Product A (at reduced selling prices) would be expected to be:

700,000 units at 2.75 per unit

or 750,000 units at 2.55 per unit.

Currently total fixed costs are 1,800,000 per year (all three products).

Required:

1. Calculate the break-even (in sales revenue).
2. Advise the management if the expenditure on advertising - together with selling price reduction - should be introduced for Product A.