Question
Data concerning Kurek Corporation's single product appear below: Per Unit Percent of Sales Selling price $180 100% Variable expenses 126 70% Contribution margin $54 30%
Data concerning Kurek Corporation's single product appear below:
|
| Per Unit | Percent of Sales |
| Selling price | $180 | 100% |
| Variable expenses | 126 | 70% |
| Contribution margin | $54 | 30% |
Fixed expenses are $190,000 per month. The company is currently selling 4,000 units per month.
The marketing manager would like to cut the selling price by $12 and increase the advertising budget by $11,100 per month. The marketing manager predicts that these two changes would increase monthly sales by 1,500 units. What should be the overall effect on the company's monthly net operating income of this change?
| a | What is the new contribution margin per unit? |
| b | What is the new sales volume? |
| c | What is the new total contribution margin? |
| d | What is the current total contribution margin? |
| e | What is the change in total contribution margin? |
| f | What should be the overall effect on the company's monthly net operating income of this change? |
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Nessus Network Auditing
Authors: Russ Rogers
2nd Edition
1597492086, 978-1597492089
