Question
Data concerning Eleonora Corporation's single product appear below: Selling Price 170 100% Variable expenses 102 60% Contribution margin 68 40% Data concerning Eleonora Corporation's single
Data concerning Eleonora Corporation's single product appear below:
Selling Price | 170 | 100% |
Variable expenses | 102 | 60% |
Contribution margin | 68 | 40%
|
Data concerning Eleonora Corporation's single product appear below: Selling Price 170 100% Variable expenses 102 60% Contribution margin 68 40% Fixed expenses are $475,000 per month. The company is currently selling 8,000 units per month. The marketing manager would like to cut the selling price by $14.00 and increase the advertising budget by $35,000 per month. The marketing manager predicts that these two changes would increase monthly sales by 2,800 units. What should be the overall effect on the company's monthly net operating income of this change?
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