Hinsey Corporation produces and sells a single product. Data concerning the product appear below: Fixed expenses are $300,000 per month. The company is currently selling 4,000 units per month. Consider each of the following questions independently.
-This question is to be considered independently of all other questions relating to Hinsey Corporation. Refer to the original data when answering this question.
The marketing manager believes that an $18,000 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?

Question

Hinsey Corporation produces and sells a single product. Data concerning the product appear below:  Fixed expenses are $300,000 per month. The company is currently selling 4,000 units per month. Consider each of the following questions independently.
-This question is to be considered independently of all other questions relating to Hinsey Corporation. Refer to the original data when answering this question.
The marketing manager believes that an $18,000 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?

Quizplus · Accepted Answer

The Answer of Hinsey Corporation produces and sells a single product. Data concerning the product appear below:  Fixed expenses are $300,000 per month. The company is currently selling 4,000 units per month. Consider each of the following questions independently.
-This question is to be considered independently of all other questions relating to Hinsey Corporation. Refer to the original data when answering this question.
The marketing manager believes that an $18,000 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?

Hinsey Corporation Produces and Sells a Single Product