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Wrobbel Corporation produces and sells a single product. Data concerning that product appear below: Per Unit $290 58 Percent of Sales 100% 20% Selling price
Wrobbel Corporation produces and sells a single product. Data concerning that product appear below: Per Unit $290 58 Percent of Sales 100% 20% Selling price Variable expenses Contribution margin $232 80% Fixed expenses are $210,000 per month. The company is currently selling 2,000 units per month. Management is considering using a new component that would increase the unit variable cost by $64. Since the new component would improve the company's product, the marketing manager predicts that monthly sales would increase by 700 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.) Change in net operating income
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