Data concerning Kardas Corporation's single product appear below: The company is currently selling 8,000 units per month. Fixed expenses are $719,000 per month. The marketing manager believes that a $20,000 increase in the monthly advertising budget would result in a 180 unit increase in monthly sales. What should be the overall effect on the company's monthly net operating income of this change?

Question

Data concerning Kardas Corporation's single product appear below:  The company is currently selling 8,000 units per month. Fixed expenses are $719,000 per month. The marketing manager believes that a $20,000 increase in the monthly advertising budget would result in a 180 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_c770_8b5e_8ffe_cbd2d5a57194_TB7552_00 Net operating income would increase by $160.

Data Concerning Kardas Corporation's Single Product Appear Below: the Company