Question
A companys manager estimates that next year, reducing advertising costs by $35 000 will cause sales revenue to decrease by $80 000. If the companys
A companys manager estimates that next year, reducing advertising costs by $35 000 will cause sales revenue to decrease by $80 000. If the companys contribution margin ratio is 40%, what will be overall effect on net income?
| a. | Net income will increase by $3000. |
| b. | Net income will decrease by $3000. |
| c. | Net income will increase by $18 000. |
| d. | Net income will decrease by $18 000. |
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Financial accounting
Authors: Walter T. Harrison Jr., Charles T. Horngren, C. William Thom
9th edition
978-0132751216, 132751127, 132751216, 978-0132751124
