L&M Manufacturing Produces a Single Product That Sells for $16

Multiple Choice

L&M Manufacturing produces a single product that sells for $16. Variable (flexible) costs per unit equal $11.20. The company expects the total fixed (capacity-related) costs to be $7,200 for the next month at the projected sales level of 20,000 units. In an attempt to improve performance, management is considering a number of alternative actions. Each situation is to be evaluated separately.
-Suppose that L&M Manufacturing's management believes that a $1,600 increase in the monthly advertising expense will result in a considerable increase in sales.How much must sales increase in a month to justify this additional expenditure?

A) 200 units
B) 334 units
C) 500 units
D) None of the above is correct.