Thornbrough Corporation produces and sells a single product with the following characteristics:
The company is currently selling 7,000 units per month. Fixed expenses are $901,000 per month. Consider each of the following questions independently.
-This question is to be considered independently of all other questions relating to Thornbrough 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 $53,000 per month.The marketing manager predicts that these two changes would increase monthly sales by 1,000 units.What should be the overall effect on the company's monthly net operating income of this change?

Question

Thornbrough Corporation produces and sells a single product with the following characteristics:
  The company is currently selling 7,000 units per month. Fixed expenses are $901,000 per month. Consider each of the following questions independently.
-This question is to be considered independently of all other questions relating to Thornbrough 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 $53,000 per month.The marketing manager predicts that these two changes would increase monthly sales by 1,000 units.What should be the overall effect on the company's monthly net operating income of this change?

Quizplus · Accepted Answer

11ea7761_1871_b6fe_81a5_8f50c811f78a_TB2580_00 Overall net operating income will decrease by $21,000

Thornbrough Corporation Produces and Sells a Single Product with the Following