Question
Shelhorse Corporation produces and sells a single product. Data concerning that product appear below: Per Unit Percent of Sales Selling price $ 260 100 %
Shelhorse Corporation produces and sells a single product. Data concerning that product appear below: Per Unit Percent of Sales Selling price $ 260 100 % Variable expenses 91 35 % Contribution margin $ 169 65 % Fixed expenses are $366,000 per month. The company is currently selling 6,100 units per month. Required: The marketing manager believes that a $23,000 increase in the monthly advertising budget would result in a 150 unit increase in monthly sales. What should be the overall effect on the company's monthly net operating income of this change?
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