Birney Company has prepared the following budget data:
|
Sales |
150,000 units |
|
Selling price |
$25 per unit |
|
Variable expenses |
$15 per unit |
|
Fixed manufacturing expenses |
$800,000 |
|
Fixed selling and admin. expenses |
$700,000 |
An advertising agency claims that an aggressive advertising campaign would enable the company to increase its unit sales by 20%. What is the maximum amount that the company can pay for advertising and obtain a net operating income of $200,000?
A) $100,000
B) $200,000
C) $300,000
D) $550,000