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Kuzio Corporation produces and sells a single product. Data concerning that product appear below: Per UnitPercent of Sales Selling price$130100% Variable expenses7860% Contribution margin$5240% The
Kuzio Corporation produces and sells a single product. Data concerning that product appear below:
Per UnitPercent of Sales
Selling price$130100%
Variable expenses7860%
Contribution margin$5240%
The company is currently selling 6,000 units per month. Fixed expenses are $263,000 per month. The marketing manager believes that a $5,000 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?
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