Question
The EV85622 company has provided the following cost, price, and sales data: Per Unit Selling price $ 240 Variable expenses 54 Contribution margin $ 186
The EV85622 company has provided the following cost, price, and sales data:
Per Unit | ||||||||
Selling price | $ | 240 | ||||||
Variable expenses | 54 | |||||||
Contribution margin | $ | 186 | ||||||
The EV85622 company is currently selling 8,000 units per month. Fixed expenses are $880,000 per month.
The marketing manager would like to cut the selling price by $28 and increase advertising spending by $60,000 per month. The marketing manager predicts that these changes would increase monthly sales quantity by 20%. What would be the overall effect on the EV85622 company's monthly net operating income of this change?
(Note: A POSITIVE number indicates an INCREASE in net operating income, and a NEGATIVE number indicates a DECREASE in net operating income)
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