Larita Corporation produces and sells a single product.Data concerning that product appear below: Fixed expenses are $243, 000 per month.The company is currently selling 2, 000 units per month.
Required:
The marketing manager believes that a $28, 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? Show your work!

Question

Larita Corporation produces and sells a single product.Data concerning that product appear below:  Fixed expenses are $243, 000 per month.The company is currently selling 2, 000 units per month.
Required:
The marketing manager believes that a $28, 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? Show your work!

Quizplus · Accepted Answer

The Answer of Larita Corporation produces and sells a single product.Data concerning that product appear below:  Fixed expenses are $243, 000 per month.The company is currently selling 2, 000 units per month.
Required:
The marketing manager believes that a $28, 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? Show your work!

Larita Corporation Produces and Sells a Single Product