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. The marketing manager would like to cut the selling price by $18 and increase the advertising budget by $37,000 per month.The marketing manager predicts that these two changes would increase monthly sales by 1,600 units.What should be the overall effect on the company's monthly net operating income of this change?
A) increase of $118,200
B) increase of $302,200
C) decrease of $118,200
D) decrease of $7,800

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. The marketing manager would like to cut the selling price by $18 and increase the advertising budget by $37,000 per month.The marketing manager predicts that these two changes would increase monthly sales by 1,600 units.What should be the overall effect on the company's monthly net operating income of this change?
A) increase of $118,200 
B) increase of $302,200 
C) decrease of $118,200 
D) decrease of $7,800

Quizplus · Accepted Answer

11ea7761_1871_1aba_81a5_e7d14c42c1c3_TB2580_00 Overall net operating income will decrease by $7,800

Data Concerning Lemelin Corporation's Single Product Appear Below