Question
Addy produces and sells a single product. Data concerning that product appear below: Percent of Selling price Per Unit $150 Sales 100% Variable expenses
Addy produces and sells a single product. Data concerning that product appear below: Percent of Selling price Per Unit $150 Sales 100% Variable expenses 75 50% Contribution margin $ 75 50% The company is currently selling 6,500 units per month. Fixed expenses are $184,000 per month. The marketing manager believes that a $7,800 increase in the monthly advertising budget would result in a 190 unit increase in monthly sales. What should be the overall effect on the company's monthly net operating income of this change?
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