Data concerning Lemelin Corporation's single product appear below:
The company is currently selling 7,000 units per month. Fixed expenses are $581,000 per month. Consider each of the following questions independently.
-This question is to be considered independently of all other questions relating to Lemelin Corporation.Refer to the original data when answering this question. The marketing manager believes that an $11,000 increase in the monthly advertising budget would result in a 100 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 $11,000
B) increase of $11,500
C) decrease of $500
D) increase of $500

Question

Data concerning Lemelin Corporation's single product appear below:
  The company is currently selling 7,000 units per month. Fixed expenses are $581,000 per month. Consider each of the following questions independently.
-This question is to be considered independently of all other questions relating to Lemelin Corporation.Refer to the original data when answering this question. The marketing manager believes that an $11,000 increase in the monthly advertising budget would result in a 100 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 $11,000 
B) increase of $11,500 
C) decrease of $500 
D) increase of $500

Quizplus · Accepted Answer

11ea7761_1870_cc98_81a5_89e8ed8ee5a5_TB2580_00 Overall net operating income will increase by $500

Data Concerning Lemelin Corporation's Single Product Appear Below