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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 $ 120 100 %
Dybala Corporation produces and sells a single product. Data concerning that product appear below:
Per Unit | Percent of Sales | ||||||
Selling price | $ | 120 | 100 | % | |||
Variable expenses | 72 | 60 | % | ||||
Contribution margin | 48 | 40 | % | ||||
The company is currently selling 5,160 units per month. Fixed expenses are $230,000 per month. The marketing manager believes that a $6,800 increase in the monthly advertising budget would result in a 250 unit increase in monthly sales. What should be the overall effect on the company's monthly net operating income of this change?
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