$!$

Requlred Information

The Foundational $15($Algo$)[$L$06-1,$ LO$6-2,$ LO$6-3,$ LO$6-4,$ LO$6-5]$

$[$The following information applies to the questions displayed below.$]$

Diego Company manufactures one product that is sold for $$77$ per unit in two geographic regions$-$East and West. The following information pertains to the company's first year of operations in which it produced $48,000$ units and sold $43,000$ units.The company sold $33,000$ units in the East region and $10,000$ units in the West region. It determined $$220,000$ of its fixed selling and administrative expense is traceable to the West region, $$170,000$ is traceable to the East region, and the remaining $$66,000$ is a common fixed expense. The company will continue to incur the total amount of its fixed manufacturing overhead costs as long as it continues to produce any amount of its only product.

Foundational $6-15($Algo$)$

$15.$ Assume the West region Invests $$38,000$ in a new advertising campaign in Year $2$ that increases its unit sales$-$by $20\%.$ If all else remains constant, what would be the profit impact of pursuing the advertising campaign?

Profit will

increase

by