1.Jim wants to determine the monthly level of sales volume he needs to generate $24,000 in profit after paying taxes of 40 percent. His product sells for $32 each and his incremental cost is just $24 each. He does need to cover the monthly rent of $16,000.
2.If the economy gets bad and sales decline, what level of monthly sales volume will Jim need to just break even?
3.Jim believes that if he spends $6,000 per month in advertising costs, he can raise the selling price of his product to $34. Is this a good idea? Support your answer.