Harrison Handbags has an advertising budget of $150,000. The company believes that if it increases the advertising budget by $24,000, it will sell an additional 32,000 purses and each purse will provide an additional profit to the company of $1.00 before consideration of the advertising costs. What additional profit should the company expect if it accepts the proposed budget increase?
Calculations:
2a. Incremental advertising cost per unit: amount of increase for advertising budget / additional units to be sold =per unit(?)
2b. Unit incremental profit: (additional profit to the company before consideration of advertising costs) - (answer per unit from previous calculation) = Per unit(?)
2c. Additional profit: answer per unit for previous question x additional units to be sold = .
Question:
2d. What additional profit should the company expect if it accepts the proposed budget increase?