Question
Larita Corporation produces and sells a single product. Data concerning that product appear below: Per Unit Percent of Sales Selling price $ 190 100 %
Larita Corporation produces and sells a single product. Data concerning that product appear below: Per Unit Percent of Sales Selling price $ 190 100 % Variable expenses 57 30 % Contribution margin $ 133 70 % Fixed expenses are $348,000 per month. The company is currently selling 4,300 units per month. The marketing manager believes that a $28,000 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.)
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