Data concerning Runnells Corporation's single and sells a product. Data co cerning that product appear...
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Accounting
Data concerning Runnells Corporation's single and sells a product. Data co cerning that product appear below:
Per Unit
Percent of Sales
Selling price
$140
100%
Variable expenses
70
50%
Contribution margin
$ 70
50%
The company is currently selling 5,700 units per month. Fixed expenses are $342,500 per month. The marketing manager believes that a $6,700 increase in the monthly advertising budget would result in a 120 unit increase in monthly sales. What should be the overall effect on the company's monthly net operating income of this change?
Increase of $1,700
Increase of $8,400
Decrease of $6,700
Decrease of $1,700
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