Waleed Company provides the following per unit analysis, based on an actual sales volume of 6,000 units, Selling price Rs50 Per Unit & Variable cost/unit Rs14. Total Fixed Cost Rs180,000 for the year.

Required;

1. Prepare a mini-income statement to show the net income/loss, if actual sales are 6,000 units?
2. Calculate the selling price that will be needed if Waleed Company desires a target income next year of Rs24,800 and believes it can sell 6,400 units. Variable and fixed costs would be the same as this year.
3. If the selling price was increased by 10%, Waleed Co. expects sales volume would decrease by 5%, but only if advertising (a fixed cost), was increased by Rs20,000. Prepare a mini-income statement to calculate the revised income statement & indicate whether you think Waleed should pursue this option or not, Explain Why?