Stratford Company distributes a lightweight lawn chair that sells for $80 per unit. Variable expenses are $40.00 per unit, and fixed expenses total $200,000 annually.

.	Refer to the original data. Assume that the company sold 40,500 units last year. The sales manager is convinced that a 12% reduction in the selling price, combined with a $63,000 increase in advertising expenditures, would increase annual unit sales by 50%.

a.	Prepare two contribution format income statements, one showing the results of last years operations and one showing what the results of operations would be if these changes were made. (Do not round intermediate calculations. Round your "Per unit" answers to 2 decimal places.)

I am just missing the second part I cant figure it out in the chart.

6.

Refer to the original data. Assume again that the company sold 40,500 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 $2.40 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? Do not prepare an income statement; use the incremental analysis approach. *The amount by which advertising can be increased is:

Stratford Company Contribution Margin Income Statement Last Year Proposed 60,750 units 40,500 units Total Per Unit Total Per Unit $ 3,240,000 S Sales Variable expenses Contribution margin Fixed expenses Net operating income 1,420,000 1,620,000 1,620,000 200,000 80.00 40.00 40.00 0.00 Net operating inco 420000