Question
Dybala Corporation produces and sells a single product. Data concerning that product appear below: Selling Price.....$110 per unit 100% of sales Variable expenses 66 per
Dybala Corporation produces and sells a single product. Data concerning that product appear below:
Selling Price.....$110 per unit 100% of sales
Variable expenses 66 per unit 60% of sales
Contribution Margain $44 per unit 40% of sales
The company is currently selling 5,000 units per month. Fixed expenses are $173,000 per month. The marketing manager believes that a $6,000 increase in the monthly advertising budget would result in a 170 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 $1,480 B. decrease of $6,000 C. increase of $7,480 D. decrease of $1,480
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