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Feather Friends, Incorporated, distributes a high-quality wooden birdhouse that sells for $40 per unit. Varlable...

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Accounting

Feather Friends, Incorporated, distributes a high-quality wooden birdhouse that sells for $40 per unit. Varlable expenses are $20.00 per unit, and fixed expenses total $180,000 per year. Its operating results for last year were as follows: Variable expenses Contribution margin Fixed expenses Net operating income $ 1,980,000 540,000 540,000 180,000 $360,000 Required: Answer each question Independently based on the original data: 6. The president does not want to change the selling price. Instead, he wants to Increase the sales commission by $2.20 per unit. He thinks this move, combined with some increase in advertising, would increase this year's unit sales by 25%. How much could the president increase this years advertising expense and still earn the same $360,000 net operating income as last year?

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