Question 3 (25 marks) Financial information obtained from Apple Limited is shown as below: Percent of sales Per unit Selling price $120 100% Variable expenses 72 60% Contribution margin $ 48 Fixed expenses are $63,000 per month and the company is selling 5,000 units per month. Required: Use vertical incremental approach (each part: 1 column and 3 rows figures) 1. The marketing manager believes that $14,000 increase in the monthly advertising budget would increase monthly sales by $33,000. Should the advertising budget be increased? Explain briefly in one short sentence. (13 marks) 2. Refer to the original data. Management is considering using higher-quality components. The marketing manager believes that the higher-quality product would increase sales volume by 10% and increase the variable cost by $4 per unit per month. Should the higher-quality components be used? Explain briefly in one short sentence. (12 marks)