Data concerning Kardas Corporation's single product appear below: The company is currently selling 8,000 units per month.Fixed expenses are $719,000 per month.The marketing manager believes that a $20,000 increase in the monthly advertising budget would result in a 180 unit increase in monthly sales.What should be the overall effect on the company's monthly net operating income of this change?
A)decrease of $160
B)increase of $20,160
C)decrease of $20,000
D)increase of $160

Question

Data concerning Kardas Corporation's single product appear below:  The company is currently selling 8,000 units per month.Fixed expenses are $719,000 per month.The marketing manager believes that a $20,000 increase in the monthly advertising budget would result in a 180 unit increase in monthly sales.What should be the overall effect on the company's monthly net operating income of this change?
A)decrease of $160 
B)increase of $20,160 
C)decrease of $20,000 
D)increase of $160

Quizplus · Accepted Answer

11ea7998_5e08_17c5_911b_a72c43008baa_TB2627_00_TB2627_00 Net operating income would increase by $160.

Data Concerning Kardas Corporation's Single Product Appear Below: the Company