Problem 1 Because of inconsistency in sales; of its sole product - a high-capacity battery for mobile phones, Salvo Inc. has been experiencing difculty for some time. The company's income statement for the most recent month is given below: Sales (19,500 units @ P300) P5,850,000 Less variable expenses 4 095 000 Contribution margin 1355,000 Less xed expenses 1 300 000 Net loss P 14,QQI Required: 1. The break even in peso sales for Salvo, Inc. 2. The president believes that a P160,000 increase in the monthly advertising budget, combined with an intensied effort by the sales staff, will result in an P800,000 increase in monthly sales. If the president is right, what will be the effect on the company's monthly net income or loss? 3. Refer to the original data. The sales manager is convinced that a 10% reduction in the selling price, combined with an increase of P 600,000 in the monthly advertising budget, will cause unit sales to double. What will the new prot or loss if these changes are adopted? 4. Refer to the original data. The Marketing Department thinks that a fancy new package for the mobile phone battery would help sales. The new package would increase packaging costs by P150 per unit. Assuming no other changes, how many units would have to be sold each month to earn a prot of P 9?,500? 5. Refer to the original data. By automating certain operations, the company could reduce variable costs by P3 per unit. However, xed costs would increase by P 72,000 each month. How would the breakeven point in units change if the company automated the operations? 6. At what level of produetion Would the automation of the production process be indifferent to the present process? '1'. Which of the two methods (the present or the automated) has higher income at the level of sales of 26,000 units