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 an advertising expenditure increase of $22,500 coupled with a 10% reduction in the selling price will double the sales quantity. Determine the net income (or loss) if these proposed changes are adopted.