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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 margin $115 50%
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% |
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?
A) decrease of $1,250
B) decrease of $16,000
C) increase of $1,250
D) increase of $17,250
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