Zeeb Corporation produces and sells a single product.Data concerning that product appear below: Fixed expenses are $355,000 per month.The company is currently selling 5,000 units per month.
Required:
The marketing manager believes that a $12,000 increase in the monthly advertising budget would result in a 160 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

Zeeb Corporation produces and sells a single product.Data concerning that product appear below:  Fixed expenses are $355,000 per month.The company is currently selling 5,000 units per month.
Required:
The marketing manager believes that a $12,000 increase in the monthly advertising budget would result in a 160 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 Zeeb Corporation produces and sells a single product.Data concerning that product appear below:  Fixed expenses are $355,000 per month.The company is currently selling 5,000 units per month.
Required:
The marketing manager believes that a $12,000 increase in the monthly advertising budget would result in a 160 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!

Zeeb Corporation Produces and Sells a Single Product