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Data concerning Massing Corporation's single product appear below: Per Unit Percent of Sales Selling price $ 230 100 % Variable expenses 115 50 % Contribution
Data concerning Massing Corporation's single product appear below:
Per Unit | Percent of Sales | ||||||
Selling price | $ | 230 | 100 | % | |||
Variable expenses | 115 | 50 | % | ||||
Contribution margin | 115 | 50 | % | ||||
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The company is currently selling 9,000 units per month. Fixed expenses are $837,000 per month. The marketing manager believes that a $16,000 increase in the monthly advertising budget would result in a 150 unit increase in monthly sales. What should be the overall effect on the company's monthly net operating income of this change?
increase of $17,250
increase of $1,250
decrease of $1,250
decrease of $16,000
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