Question
Data concerning Runnells Corporation's single and sells a product. Data co cerning that product appear below: Per Unit Percent of Sales Selling price $140 100%
Data concerning Runnells Corporation's single and sells a product. Data co cerning that product appear below:
Per Unit Percent of Sales Selling price $140 100%
Variable expenses 70 50%
Contribution margin $ 70 50%
The company is currently selling 6,300 units per month. Fixed expenses are $385,300per month.
The marketing manager believes that a $6,700 increase in the monthly advertising budget would result in a 130 unit increase in monthly sales. What should be the overall effect on the company's monthly net operating income of this change?
Decrease of $6,700
Increase of $9,100
Increase of $2,400
Decrease of $2,400
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