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Chris Corporation produces and sells a single product. Data concerning that product appear below: Per Unit Percent of Sales Selling price $130 100 % Variable
Chris Corporation produces and sells a single product. Data concerning that product appear below:
| Per Unit
| Percent of Sales |
| ||||
Selling price |
| $130 |
|
| 100 | % | |
Variable expenses |
| $78 |
|
| 60% |
| |
Contribution margin |
| $52 |
|
| 40% |
|
The company is currently selling 6,000 units per month. Fixed expenses are $263,000 per month. The marketing manager believes that a $5,000 increase in the monthly advertising budget would result in a 140 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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