Martha Manufacturing produces a single product that sells for $80. Variable costs per unit equal $32. The company expects total fixed costs to be $72,000 for the next month at the projected sales level of 2,000 units. In an attempt to improve performance, management is considering a number of alternative actions. Each situation is to be evaluated separately.

Martha Manufacturing produces a single product that sells for $80. Variable costs per unit equal $32. The company expects total fixed costs to be $72,000 for the next month at the projected sales level of 2,000 units. In an attempt to improve performance, management is considering a number of alternative actions. Each situation is to be evaluated separately. 33. Suppose management believes that a $16,000 increase in the monthly advertising expense will result in a considerable increase in sales. If sales increase by 400 units, what will be the increase in net income? a. $1,200 b. $2,200 c. $3,200 d. $4,200 34. Suppose that management believes that a 10% reduction in the selling price will result in a 10% increase in sales. If this proposed reduction in selling price is implemented, a. operating income will decrease by $8,000. b. operating income will increase by $8,000. c. operating income will decrease by $16,000. d. operating income will increase by $16,000