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The company increases advertising expenditures

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Reference no: EM13945120

Fox Company developed the following income statement using a contribution margin approach.

1222_68-B-F-F-M (424).png

The projected income statement was based upon sales of 20,000 units. Fox has the capacity to produce 25,000 units during the year.

1. Determine break even point in units. 

2. The sales manager believes the company could increase sales by 3,000 units if advertising expenditures are increased by $30,000. Determine the effect on income if the company increases advertising expenditures.

Reference no: EM13945120

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