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The Night & Day Guitar company is a manufacturer of custom guitars. The selling price for one of their guitars is $1,060 with direct materials
The Night & Day Guitar company is a manufacturer of custom guitars. The selling price for one of their guitars is $1,060 with direct materials and direct labor costing $212 and $275 per guitar respectively. The fixed manufacturing costs for the Night & Day Guitar company are $8,619 and the variable overhead is $38 per unit. The fixed and variable selling expenses are $1,895 and $89 per guitar respectively. The variable shipping costs per guitar are $139. Remaining fixed period costs are $1,306. During the period, Night and Day sold 142 guitars. Night and day is very proud of their product and they think they can get a higher price and sell more guitars if they hire a larger full time sales force and spend more on advertising. It is anticipated that expanding the sales force will increase fixed selling expenses by $2.797 and spending $7.905 during the period on advertising will allow the company to increase their selling price by $110 and sell 38 more guitars during the period. What is the impact of the decision on the net income of Night and day. An increase in net income should be entered as a positive number, a decrease in net income should be entered as a negative number Round your answer to the whole dollar
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