Oliver Inc. currently has a contribution margin of $25 on its only product. Oliver Inc. is considering spending $8,000 more on advertising this year to generate an increase in sales of 5,000 units. How will this change affect its operating income?
A) It will increase operating income by $117,000.
B) It will increase operating income by $133,000.
C) It will decrease operating income by $8,000.
D) It will increase operating income by $125,000.
Correct Answer:
Verified
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