Question

Fall Files Inc . Income Same Co 5 1800 360.000s 144000 296.000 8 2000 00 1200 42.000 222.000 250.000 Would you recommend that the company do as the sales manager suggests Hehe combined with some cas e h s, w he company S18000 e by 25 W change the space he was een su y how much could advertising be increased with prostemang unchanged to prepare an income woment in the incrementalna

Answer 1

Solving for part c since a and b are correct:

No of units	22500	[18000*125%]
Sales after increase	450000	[22500*20]
Less: Variable expenses	202500	[22500*9]
Contribution	247500
	211500	[plugged variable]
Desired profit	36000

Increase in advertising expenditure = 211500 - 180,000 = 31500