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Dybala Corporation produces and sells a single product. Data concerning that product appear below: Per Unit Percent of Sales Selling price $ 125 100 %
Dybala Corporation produces and sells a single product. Data concerning that product appear below:
Per Unit | Percent of Sales | ||||||
Selling price | $ | 125 | 100 | % | |||
Variable expenses | 75 | 60 | % | ||||
Contribution margin | 50 | 40 | % | ||||
The company is currently selling 5,320 units per month. Fixed expenses are $240,000 per month. The marketing manager believes that a $7,600 increase in the monthly advertising budget would result in a 330 unit increase in monthly sales. What should be the overall effect on the company's monthly net operating income of this change?
a) increase of $8,9000
b) decrease of $7,600
c) increase of $16.500
d) decrease of $8,900
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