Problem 6 The following extracts are taken from sales budget of a company for a current year: $ in '000 Sales: 40,000 units @ ?25 per unit 1,000 Selling costs: Advertising 100 Salesmen's salaries 80 Travelling expenses 50 Rent of sales office 10 Others 10 250 The management is considering a proposal to establish a new market in the eastern region in the next year. It is proposed to increase the advertising expenditure by 25% and appoint an additional sales supervisor at a salary of $30 000 per year to establish a market. This will involve additional travelling and travelling expense shall increase by 10%. Target annual sales volume at the existing selling price for the new market is 10,000 units. The estimated variable cost of production is $12 per unit. Should the company try to establish the new market