Data concerning Lemelin Corporation's single product appear below:
The company is currently selling 7,000 units per month. Fixed expenses are $581,000 per month. Consider each of the following questions independently.
-This question is to be considered independently of all other questions relating to Lemelin Corporation.Refer to the original data when answering this question. Management is considering using a new component that would increase the unit variable cost by $3.Since the new component would increase the features of the company's product,the marketing manager predicts that monthly sales would increase by 200 units.What should be the overall effect on the company's monthly net operating income of this change?
A) decrease of $22,400
B) decrease of $1,400
C) increase of $22,400
D) increase of $1,400

Question

Data concerning Lemelin Corporation's single product appear below:
  The company is currently selling 7,000 units per month. Fixed expenses are $581,000 per month. Consider each of the following questions independently.
-This question is to be considered independently of all other questions relating to Lemelin Corporation.Refer to the original data when answering this question. Management is considering using a new component that would increase the unit variable cost by $3.Since the new component would increase the features of the company's product,the marketing manager predicts that monthly sales would increase by 200 units.What should be the overall effect on the company's monthly net operating income of this change?
A) decrease of $22,400 
B) decrease of $1,400 
C) increase of $22,400 
D) increase of $1,400

Quizplus · Accepted Answer

11ea7761_1870_a587_81a5_4b3ffb9aec95_TB2580_00 Overall net operating income will increase by $1,400

Data Concerning Lemelin Corporation's Single Product Appear Below