Cobble Corporation produces and sells a single product.Data concerning that product appear below: Fixed expenses are $499,000 per month.The company is currently selling 5,000 units per month.The marketing manager would like to cut the selling price by $13 and increase the advertising budget by $33,000 per month.The marketing manager predicts that these two changes would increase monthly sales by 900 units.What should be the overall effect on the company's monthly net operating income of this change?
A)increase of $56,100
B)decrease of $8,900
C)increase of $99,300
D)decrease of $56,100

Question

Cobble Corporation produces and sells a single product.Data concerning that product appear below:  Fixed expenses are $499,000 per month.The company is currently selling 5,000 units per month.The marketing manager would like to cut the selling price by $13 and increase the advertising budget by $33,000 per month.The marketing manager predicts that these two changes would increase monthly sales by 900 units.What should be the overall effect on the company's monthly net operating income of this change?
A)increase of $56,100 
B)decrease of $8,900 
C)increase of $99,300 
D)decrease of $56,100

Quizplus · Accepted Answer

11ea7998_5e08_3ed7_911b_bf7543fff756_TB2627_00_TB2627_00 Net operating income decreases by $8,900.

Cobble Corporation Produces and Sells a Single Product