Data concerning Massing Corporation's single product appear below: The company is currently selling 9,000 units per month. Fixed expenses are $837,000 per month. The marketing manager believes that a $16,000 increase in the monthly advertising budget would result in a 150 unit increase in monthly sales. What should be the overall effect on the company's monthly net operating income of this change?
A)increase of $1,250
B)decrease of $16,000
C)decrease of $1,250
D)increase of $17,250

Question

Data concerning Massing Corporation's single product appear below:  The company is currently selling 9,000 units per month. Fixed expenses are $837,000 per month. The marketing manager believes that a $16,000 increase in the monthly advertising budget would result in a 150 unit increase in monthly sales. What should be the overall effect on the company's monthly net operating income of this change?
A)increase of $1,250 
B)decrease of $16,000 
C)decrease of $1,250 
D)increase of $17,250

Quizplus · Accepted Answer

The Answer of Data concerning Massing Corporation's single product appear below:  The company is currently selling 9,000 units per month. Fixed expenses are $837,000 per month. The marketing manager believes that a $16,000 increase in the monthly advertising budget would result in a 150 unit increase in monthly sales. What should be the overall effect on the company's monthly net operating income of this change?
A)increase of $1,250 
B)decrease of $16,000 
C)decrease of $1,250 
D)increase of $17,250

Data Concerning Massing Corporation's Single Product Appear Below: the Company