(Solved): 5. The sales manager is convinced a 14% reduction in the selling price, combined with a $65,000 i ...

5. The sales manager is convinced a 14% reduction in the selling price, combined with a $65,000 increase in advertising, would increase this year's unit sales by 25%. If the sales manager is right, what would be this year's net operating income if his ideas are implemented? If the sales manager's ideas are implemented, how much will net operating income increase or decrease over last year? 6. The president does not want to change the selling price. Instead, he wants to increase the sales commission by $2.00 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 year's advertising expense and still earn the same $860,000 net operating income as last year?