Problem 7. Kate Company produces a single product and presented below are data taken from its recent income statement Sales (135,000 units at P20) P2,700,000 Less: Variable costs 1,890,000 Contribution Margin 810,000 Less: Fixed costs 900,000 Loss P (90,000) Required: a. The sales manager feels that an P110,000 increase in monthly advertising budget, combined with an intensified effort by the sales staff will result in a P840,000 increase in monthly sales. Considering these changes, what will be the company's increase or decrease in profit? b. The president is convinced that a 10% reduction in the selling price, combined with an increase of P35,000 in the monthly advertising budget, will cause units sales to double. Considering these changes, how much is the company's expected profit? c. A new package for the product is being considered to induce sales. This package costs P0.60 per unit. Considering the new package cost, how many units would have to be sold each month to earn a profit of P90.000