Question - Breakeven point, what-if analysis The following information pertains to Torasic Company's budgeted income statement for the month of June 2011:
Sales (1,200 units at $250) $300,000
Variable cost 150,000
Contribution margin $150,000
Fixed cost 200,000
Net loss ($50,000)
Required - The sales manager believes that a $22,500 increase in the monthly advertising expenses will result in a considerable increase in sales. How much of an increase in sales must result from increased advertising in order to break even on the monthly expenditure?