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10. Data concerning Runnells Corporation's single product appear below: Selling Price..... Variable Expenses..... Contribution Margin... Per Unit % of Sales $160 100% $80 50% $80
10. Data concerning Runnells Corporation's single product appear below: Selling Price..... Variable Expenses..... Contribution Margin... Per Unit % of Sales $160 100% $80 50% $80 50% The company is currently selling 6,000 units per month. Fixed expenses are $424.000 per month. 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? A. Increase of $8,000 B. Decrease of $1,000 C. Increase of $1,000 D. Decrease of $7,000
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