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?

a.----Incremental advertising cost per unit: amount of increase for advertising budget / additional units to be sold = $.75 per unit(?)

b.----Unit incremental profit: (additional profit to the company before consideration of advertising costs) – (answer per unit from previous calculation) = $x.xx per unit(?)

c.----Additional profit: answer per unit for previous question x additional units to be sold = $x,xxx

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2aIncremental advertising cos... View the full answer