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Azucar Company produces a chocolate almond bar. Each bar sells for $0.40. The variable costs for each bar (sugar, chocolate, almonds, wrapper, labor, and so-on) total $0.25. The total fixed costs are $60,000. During the most recent year, 1 million bars were sold. The president of Azucar, not fully satisfied with the profit performance of the chocolate bar, is considering the following options to increase the bar's profitability: (1) increase advertising; (2) increase the quality of the ingredients and, simultaneously, increase the selling price; (3) increase the selling price; (4) combinations of the three.

The company has decided to increase its selling price to $0.50. Compute the sales volume that would be needed at the new price for the company to earn the same operating income as last year.

Azucar Company produces a chocolate almond bar. Each bar sells for $0.40. The variable costs for each bar (sugar, chocolate, almonds, wrapper, labor, and so-on) total $0.25. The total fixed costs are $60,000. During the most recent year, 1 million bars were sold. The president of Azucar, not fully satisfied with the profit performance of the chocolate bar, is considering the following options to increase the bar's profitability: (1) increase advertising; (2) increase the quality of the ingredients and, simultaneously, increase the selling price; (3) increase the selling price; (4) combinations of the three.

The sales manager is confident that an aggressive advertising campaign could double sales volume. If the company president's goal is to increase this year's operating income by 50% over last year's, what is the maximum addtitional amount that can be spent on advertising?

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