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15. Drake Company's contribution format income statement for the most recent year appears below: Sales (26,000 units)... Variable expenses...... Contribution margin.. Fixed expenses...... Net operating
15. Drake Company's contribution format income statement for the most recent year appears below: Sales (26,000 units)... Variable expenses...... Contribution margin.. Fixed expenses...... Net operating loss.............. $650,000 442.000 208,000 234.000 $(26.000) The sales manager is convinced that a $60,000 expenditure on advertising will increase unit sales by 50% without any other increase in fixed expenses. If the sales manager is correct, the company's net operating income would increase by: A. $44,000 B. $34,000 C. $30,000 D. $49,000
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