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Evans Roofing Company has estimated the following amounts for its next fiscal year: Total fixed expenses $832,500 Sale price per unit 40 Variable expenses per
Evans Roofing Company has estimated the following amounts for its next fiscal year: Total fixed expenses $832,500 Sale price per unit 40 Variable expenses per unit 25 If the company spends an additional $30,000 on advertising, sales volume would increase by 2,500 units. What effect will this decision have on the operating income of Evans? A) Operating income will increase by $37,500. B) Operating income will increase by $7,500. C) Operating income will increase by $70,000 D) Operating income will decrease by $62,500.
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