37 Shelhorse Corporation produces and sells a single product. Data concerning that product appear below:...
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Accounting
37 Shelhorse Corporation produces and sells a single product. Data concerning that product appear below:
Per Unit
Percent of Sales
Selling price
$
190
100
%
Variable expenses
57
30
%
Contribution margin
$
133
70
%
Fixed expenses are $348,000 per month. The company is currently selling 4,300 units per month.
Required:
The marketing manager believes that a $17,000 increase in the monthly advertising budget would result in a 170 unit increase in monthly sales. What should be the overall effect on the company's monthly net operating income of this change?
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