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Question 4: Cost-volume-profit analysis 15 marks North America Limited produces and sells a single product - a specialized mango fruit juice. The company has fixed

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Question 4: Cost-volume-profit analysis 15 marks North America Limited produces and sells a single product - a specialized mango fruit juice. The company has fixed expenses of $628,000 per month and is currently selling 5,000 per month. Other additional information related to that product appears below: The marketing manager would like to cut the selling price by $18 and increase the advertising budget by $45,000 per month. The marketing manager predicts that these two changes will increase monthly sales by 800 units. However, the CFO suggests that the cutting of sales price alone will lead to an increase in sales units and that we must need to find ways to better utilize our existing advertising budget (i.e., without further increasing it). Indeed, the CFO suggests that he would like to make the same proposal as that of the marketing manager but without any increase in the advertising budget. Requirements (show your calculations): The CEO is in dilemma whether she should go with the marketing manager's or CFO's proposal and has asked your help in this regard. Prepare a report for the CEO to help her decide which proposal would be better

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