show evidence exercise

Illinois Corporation produces and sells a single product. Data concerning that product appear below: Per Unit Percent of Sales Selling price.. $180 100% Variable expenses 36 20% Contribution margin $144 80% Fixed expenses are $716,000 per month. The company is currently selling 6,000 units per month. Consider each of the following questions independently. 6 This question is to be considered independently of all other questions relating to Illinois Corporation Refer to the original data when answering this question Management is considering using a new component that would increase the unit variable cont by $8. Since the new component would increase the features of the company's product, the marketing manager predicts that monthly sales would increase by 400 units. What should be the overall effect on the company's monthly net operating income of this change? A. Increase of $54.400 B. decrease of $54,400 C. decrease of $6,400 D. Increase of $6,400 7. This question is to be considered independently of all other questions relating to linois Corporation Refer to the original data when answering this question The marketing manager would like to cut the selling price by $17 and increase the advertising budget by 542,000 per month. The marketing manager predicts that these two changes would increase monthly sales by 1,000 units. What should be the overall effect on the company's monthly net operating income of this change? A increase of $85,000 B. Increase of $121,000 C. decrease of $85,000 D. decrease of $17,000