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?
A) decrease of $160
B) increase of $20,160
C) decrease of $20,000
D) increase of $160

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?
A) decrease of $160 
B) increase of $20,160 
C) decrease of $20,000 
D) increase of $160

Quizplus · Accepted Answer

The Answer of 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?
A) decrease of $160 
B) increase of $20,160 
C) decrease of $20,000 
D) increase of $160

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