Question
5) Larita Corporation produces and sells a single product. Data concerning that product appear below: Selling price.. Variable expenses Contribution margin....... Per Unit $190 38
5) Larita Corporation produces and sells a single product. Data concerning that product appear below: Selling price.. Variable expenses Contribution margin....... Per Unit $190 38 $152 Percent of Sales 100% 20% 80% Fixed expenses are $243,000 per month. The company is currently selling 3,000 units per month. Required: The marketing manager believes that a $28,000 increase in the monthly advertising budget would result in a 300 unit increase in monthly sales. They also can reduce sales commission by $2 per unit. What should be the overall effect on the company's monthly net operating income of this change? Show your work
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