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

11ea7761_185e_a3db_81a5_715e0c83be20_TB2580_00 Net operating income would increase by $160.

Data Concerning Kardas Corporation's Single Product Appear Below