Question
Dybala Corporation's produces and sells a single product. Data concerning that product appear below: Per UnitPercent of SalesSelling price$160100%Variable expenses80 50% Contribution margin$ 80 50%
Dybala Corporation's produces and sells a single product. Data concerning that product appear below:
Per UnitPercent of SalesSelling price$160100%Variable expenses80
50%
Contribution margin$ 80
50%
The company is currently selling 5,500 units per month. Fixed expenses are $383,300 per month. The marketing manager believes that a $6,500 increase in the monthly advertising budget would result in a 140 unit increase in monthly sales. What should be the overall effect on the company's monthly net operating income of this change?
Decrease of $6,500
Decrease of $4,700
Increase of $11,200
Increase of $4,700
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