Question:Required:1-a.

The marketing manager argues that a $9,000 increase in the monthly advertising budget would increase monthly sales by $20,000. Calculate the increase or decrease in net operating income.

Per Unit Percent

of Sales

Selling price $125 100%

Variable expenses 80 64%

Contribution margin$ 45 36%

Fixed expenses are $85,000 per month and the company is selling 2,700 units per month.

References

Net operating income (increases or decreases) by...