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Last year, Chemise Shirt Company average selling price for its shirts was $25. Chemise is budgeting the following operating results for next year: Sales$ 1,200,000

Last year, Chemise Shirt Company average selling price for its shirts was $25. Chemise is budgeting the following operating results for next year:

Sales$ 1,200,000

Variable Cost432,000

Contribution Margin768,000

Fixed Cost288,000

Gross Margin$480,000

The marketing manager believes that a $14,000 increase in the monthly advertising budget would result in a 650 unit increase in monthly sales. What should be the overall effect on the company's annual gross margin of this change?

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