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Amount of increase for advertising budget

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Reference no: EM131668226

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?

Reference no: EM131668226

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