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Kuzio Corporation produces and sells a single product. Data concerning that product appear below: Selling price Variable expenses Contribution margin Per Unit Percent of Sales
Kuzio Corporation produces and sells a single product. Data concerning that product appear below: Selling price Variable expenses Contribution margin Per Unit Percent of Sales $ 150 60 $ 90 100% 40% 60% The company is currently selling 7,000 units per month. Fixed expenses are $209,000 per month. The marketing manager believes that a $7,100 increase in the monthly advertising budget would result in a 190 unit increase in monthly sales. What should be the overall effect on the company's monthly net operating income of this change? Multiple Choice decrease of $7,100 increase of $17,100 decrease of $10,000 increase of $10,000 Naumann Corporation produces and sells a single product. Data concerning that product appear below: Selling price Variable expenses Contribution margin Percent of Per Unit Sales $ 300 48 100% 16% $ 252 84% Fixed expenses are $220,000 per month. The company is currently selling 1,700 units per month. Required: Management is considering using a new component that would increase the unit variable cost by $61. Since the new component would improve the company's product, the marketing manager predicts that monthly sales would increase by 500 units. What should be the overall effect on the company's monthly net operating income of this change if fixed expenses are unaffected? (Negative amounts should be indicated by a minus sign.) Change in net operating income
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