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 volume. What should be the overall effect on the company's monthly net operating income of this change?
A) increase of $2,280
B) increase of $7,280
C) decrease of $5,000
D) decrease of $2,280

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 volume. What should be the overall effect on the company's monthly net operating income of this change?
A) increase of $2,280 
B) increase of $7,280 
C) decrease of $5,000 
D) decrease of $2,280

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 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 volume. What should be the overall effect on the company's monthly net operating income of this change?
A) increase of $2,280 
B) increase of $7,280 
C) decrease of $5,000 
D) decrease of $2,280

Kuzio Corporation Produces and Sells a Single Product