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Larita Corporation produces and sells a single product. Data concerning that product appear below: Per Unit Percent of Sales Selling price $ 280 100% Variable
Larita Corporation produces and sells a single product. Data concerning that product appear below: |
Per Unit | Percent of Sales | ||
Selling price | $ | 280 | 100% |
Variable expenses | 126 | 45% | |
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Contribution margin | $ | 154 | 55% |
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Fixed expenses are $354,000 per month. The company is currently selling 4,900 units per month. |
The marketing manager believes that a $23,000 increase in the monthly advertising budget would result in a 170 unit increase in monthly sales. |
Required: |
What should be the overall effect on the company's monthly net operating income of this change? (Negative amount should be indicated by a minus sign.) Change in net operating income = ....................... |
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