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Cup Cake Corporation produces and sells a single product. Data concerning that product appear below: Per Unit $130 Selling price Variable expenses Contribution margin Percent
Cup Cake Corporation produces and sells a single product. Data concerning that product appear below: Per Unit $130 Selling price Variable expenses Contribution margin Percent of Sales 100% 40% 60% 52 $ 78 The company is currently selling 6,500 units per month. Fixed expenses are $209,000 per month. The marketing manager believes that a $7,200 increase in the monthly advertising budget would result in a 120 unit increase in monthly sales. What should be the overall effect on the company's monthly net operating income of this change? Multiple Choice decrease of $7,200 increase of $9,360 increase of $2,160 decrease of $2,160
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