Kuzio Corporation produces and sells a single product.Data concerning that product appear below: The company is currently selling 6,000 units per month.Fixed expenses are $263,000 per month.The marketing manager believes that a $5,000 increase in the monthly advertising budget would result in a 140 unit increase in monthly sales.What should be the overall effect on the company's monthly net operating income of this change?
A)increase of $2,280
B)increase of $7,280
C)decrease of $5,000
D)decrease of $2,280

Question

Kuzio Corporation produces and sells a single product.Data concerning that product appear below:  The company is currently selling 6,000 units per month.Fixed expenses are $263,000 per month.The marketing manager believes that a $5,000 increase in the monthly advertising budget would result in a 140 unit increase in monthly sales.What should be the overall effect on the company's monthly net operating income of this change?
A)increase of $2,280 
B)increase of $7,280 
C)decrease of $5,000 
D)decrease of $2,280

Quizplus · Accepted Answer

11ea7998_5e06_43fb_911b_5b9a5beb8c27_TB2627_00_TB2627_00 Net operating income would increase by $2,280.

Kuzio Corporation Produces and Sells a Single Product