Hacker Aggregates mines and distributes various types of rocks. Most of the company's rock is sold to contractors who use the product in highway construction projects. Treva Hacker, company president, believes that the company needs to advertise to increase sales. She has proposed a plan to the other managers that Hacker Aggregates spend $100,000 on a targeted advertising campaign. The company currently sells 25,000 tons of aggregate for total revenue of $5,000,000. Other data related to the company's production and operational costs follow: Direct labor: $1,500,000 Variable Production Overhead: 200,000 Fixed Production Overhead: 350,000 Selling and administrative expenses: Variable 50,000 Fixed 300,000 A. Compute the break-even point in units (i.e., tons) for Hacker Aggregates. tons B. Compute the contribution margin ratio for Hacker Aggregates. Enter as a decimal and round to 2 places.
If Treva decides to spend $100,000 on advertising and the company expects the advertising to increase sales by $200,000, should the company increase the advertising?If the company increases the advertising, the contribution margin will increase by $??? and net income will increase by $?