The SkinCare Corp. was reviewing the marketing strategy for Rashes-be gone ointment, a product designed to reduce sore muscles. Available information about RBG is shown below:

	Rashes be gone
Price per unit	$3.00
Variable cost per unit	$1.80
Sales volume	2,000,000 units

The company was trying to decide between two alternative marketing strategieswhether to reduce price by 20% or increase advertising expenditure by $250,000. Answer the questions below:

1. What is the contribution per unit of Rashes be Gone?
2. What sales increase in units and dollars will be necessary to recover the increased expenditure on advertising?
3. At the current level of sales, what is the total dollar amount of contribution generated by the total number of units sold?
4. If price is reduced by 20%, what will be:

1. the new price?

4. 2. the new contribution per unit?
5. If price is reduced by 20%, how many units will "Rashes Be Gone" need to sell in order to generate the same total dollar amount of contribution as before?