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Wrobbel Corporation produces and sells a single product. Data concerning that product appear below: Percent of Sales 100% 20% Per Unit $250 Selling price Variable
Wrobbel Corporation produces and sells a single product. Data concerning that product appear below: Percent of Sales 100% 20% Per Unit $250 Selling price Variable expenses 50 Contribution margin $200 80% Fixed expenses are $170,000 per month. The company is currently selling 1,200 units per month. Management is considering using a new component that would increase the unit variable cost by $66. Since the new component would improve the company's product, the marketing manager predicts that monthly sales would increase by 500 units Required What should be the overall effect on the company's monthly net operating income of this change if fixed expenses are unaffected? (Negative amount should be indicated by a minus sign.)
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