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Naumann Corporation produces and sells a single product. Data concerning that product appear below: Per Unit $ 180 Selling price Variable expenses Contribution margin Percent

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Naumann Corporation produces and sells a single product. Data concerning that product appear below: Per Unit $ 180 Selling price Variable expenses Contribution margin Percent of Sales 100% 20% 36 $ 144 80% Fixed expenses are $ 100,000 per month. The company is currently selling 1,500 units per month Required: Management is considering using a new component that would increase tile unit variable cost by 550. Since the new component would improve the company's product the marketing manager predicts that monthly sales would increase by 700 units. What should be the overall effect on the company's monthly net operating income of this change if fixed expenses are unaffected? (Negative amount should be indicated by a minus sign.) 70n- nterven- eam Change in net operating income

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