The group president for Household Products Corporations was reviewing price and promotion alternatives for two products: Green-Mist and Green-Rinse. Both products were designed to keep the bathroom odor free---Green-Mist being an aerosol deodorant and Green-Rinse being an in-tank toilet rinse.

The price and promotion alternatives recommended for the two products by their respective brand managers included the possibility of using additional promotion or a price reduction to stimulate sales volume. A volume, price, and cost summary for the two products follows:

  

	Green-Mist	Green-Rinse
Unit Price	$6.00	$4.00
Unit Variable Cost	$3.50	$0.50
Unit Contribution	$2.50	$3.50
Unit Volume	1,000,000 units	1,500,000 units

Both brand managers included a recommendation to either reduce price by 10 percent or invest an incremental $300,000 in advertising

1. What absolute increase in unit sales and dollar sales will be necessary to recoup the incremental increase in advertising expenditures for Green-Mist? For Green-Rinse?

2. How many additional sales dollars must be produced to cover each $1.00 of incremental advertising for Green-Mist? For Green-Rinse?

3. What absolute increase in unit sales and dollar sales will be necessary to maintain the level of total contribution dollars if the price of each product is reduced by 8%?