Kuzio Corporation produces and sells a single product. Data concerning that product appear below: The company is currently selling 6,000 units per month. Fixed expenses are $263,000 per month. The marketing manager believes that a $5,000 increase in the monthly advertising budget would result in a 140 unit increase in monthly sales. What should be the overall effect on the company's monthly net operating income of this change?

Question

Kuzio Corporation produces and sells a single product. Data concerning that product appear below:  The company is currently selling 6,000 units per month. Fixed expenses are $263,000 per month. The marketing manager believes that a $5,000 increase in the monthly advertising budget would result in a 140 unit increase in monthly sales. What should be the overall effect on the company's monthly net operating income of this change?

Quizplus · Accepted Answer

11eacbfc_c76f_52d4_8ffe_f3d3aaaa5afe_TB7552_00 Net operating income would increase by $2,280.

Kuzio Corporation Produces and Sells a Single Product