Shelhorse Corporation produces and sells a single product.Data concerning that product appear below:
Fixed expenses are $275,000 per month.The company is currently selling 4,000 units per month.
Required:
The marketing manager believes that a $13,000 increase in the monthly advertising budget would result in a 150 unit increase in monthly sales.What should be the overall effect on the company's monthly net operating income of this change? Show your work!

Question

Shelhorse Corporation produces and sells a single product.Data concerning that product appear below:
  Fixed expenses are $275,000 per month.The company is currently selling 4,000 units per month.
Required:
The marketing manager believes that a $13,000 increase in the monthly advertising budget would result in a 150 unit increase in monthly sales.What should be the overall effect on the company's monthly net operating income of this change? Show your work!

Quizplus · Accepted Answer

The Answer of Shelhorse Corporation produces and sells a single product.Data concerning that product appear below:
  Fixed expenses are $275,000 per month.The company is currently selling 4,000 units per month.
Required:
The marketing manager believes that a $13,000 increase in the monthly advertising budget would result in a 150 unit increase in monthly sales.What should be the overall effect on the company's monthly net operating income of this change? Show your work!

Shelhorse Corporation Produces and Sells a Single Product