This question is to be considered independently of all other questions relating to Robledo Corporation. Refer to the original data when answering this question. The marketing manager believes that a $7,000 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?

Question

Quizplus · Accepted Answer

The increase in sales would generate additional revenue, which would offset the increased advertising cost. If the contribution margin per unit is greater than $70, the net operating income would increase by $1,000.

This Question Is to Be Considered Independently of All Other