Question
3.Shelhorse Corporation produces and sells a single product. Data concerning that product appear below: Per Unit Percent of Sales Selling price $ 210 100 %
3.Shelhorse Corporation produces and sells a single product. Data concerning that product appear below:
|
| Per Unit | Percent of Sales | ||||
| Selling price | $ | 210 |
|
| 100 | % |
| Variable expenses |
| 84 |
|
| 40 | % |
| Contribution margin | $ | 126 |
|
| 60 | % |
Fixed expenses are $349,000 per month. The company is currently selling 4,400 units per month.
Required: ( 5 points)
The marketing manager believes that a $18,000 increase in the monthly advertising budget would result in a 180 unit increase in monthly sales. What should be the overall effect ($ amount) on the company's monthly net operating income of this change?
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Montgomery Auditing Continuing Professional Education
Authors: Patrick J. McDonnell, Barry N. Winograd, James S. Gerson, Henry R. Jaenicke, Vincent M. O'Reilly
12th Edition
0471346055, 978-0471346050
