Determine the net income

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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.

Reference no: EM131817933

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