Kuzio Corporation produces and sells a single product. Data concerning that product appear below: The company is currently selling 5,600 units per month. Fixed expenses are $194,000 per month. The marketing manager believes that a $5,300 increase in the monthly advertising budget would result in a 190 unit increase in monthly sales. What should be the overall effect on the company's monthly net operating income of this change?
A) increase of $8,950
B) increase of $14,250
C) decrease of $5,300
D) decrease of $8,950

Question

Kuzio Corporation produces and sells a single product. Data concerning that product appear below:  The company is currently selling 5,600 units per month. Fixed expenses are $194,000 per month. The marketing manager believes that a $5,300 increase in the monthly advertising budget would result in a 190 unit increase in monthly sales. What should be the overall effect on the company's monthly net operating income of this change?
A) increase of $8,950 
B) increase of $14,250 
C) decrease of $5,300 
D) decrease of $8,950

Quizplus · Accepted Answer

The Answer of Kuzio Corporation produces and sells a single product. Data concerning that product appear below:  The company is currently selling 5,600 units per month. Fixed expenses are $194,000 per month. The marketing manager believes that a $5,300 increase in the monthly advertising budget would result in a 190 unit increase in monthly sales. What should be the overall effect on the company's monthly net operating income of this change?
A) increase of $8,950 
B) increase of $14,250 
C) decrease of $5,300 
D) decrease of $8,950

Kuzio Corporation Produces and Sells a Single Product