The marketing manager of Busch's, a regional grocery store in Michigan, wants to evaluate the effectiveness of a newspaper advertising campaign for a store brand breakfast cereal named Crispy Hexagons. The cereal is purchased from Kellogg Company in Battle Creek, Michigan and packaged with Busch's name and logo. He has gathered data from the Novi store over the last 12 weeks. The data is presented below.

The cost structure for a box of Crispy hexagons without the advertising is presented below.
selling price		$3.30
purchase price		$2.60
wages and salaries*		$0.14
store lease		$0.17
store utilities and insurance		$0.11
equipment depreciation		$0.08
operating income		$0.20
* Wages were paid to cashiers, individuals who stocked shelves, employees at the butcher counter and deli, etc. Management considered these to be fixed costs.

The trendline on a plot of advertising expenditures (X-axis) vs # boxes of Crispy Hexagons sold (Y-axis) was found to be: y = 1.20 X + 10,712

1. How many additional boxes of cereal are sold per dollar of advertising? This is an exception to the "show your work rule", you will have to hard code the answer into the box at the right.

2. What is the baseline sales volume (# boxes of cereal sold) without advertising? This is also an exception to the "show your work rule," you will have to hard code your answer into the box at the right.

3. What is the incremental revenue derived from one additional dollar of advertising?

4. How much profit does an additional dollar of advertising generate?

5. How many additional boxes of cereal must a dollar of advertising generate in order for the advertising to be profitable?