Stratford Company distributes a lightweight lawn chair that sells for $30 per unit. Variable expenses are $12 per unit, and fixed expenses total $489,600 annually.

4. Assume that the operating results for last year were as follows: Sales Less: Variable expenses Contribution margin $1,020,000 408,000 612,000 Less: Fixed expenses 489,600 Net operating income $122,400 6. Refer to the original data. Assume again that the company sold 36,000 units last year. The president feels that it would be unwise to change the selling price. Instead, he wants to increase the sales commission by $2 per unit. He thinks that this move, combined with some increase in advertising, would double annual unit sales. By how much could advertising be increased with profits remaining unchanged? Increase in advertisement cost