Dybala Corporation's produces and sells a single product. Data concerning that product appear below: ...
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Accounting
Dybala Corporation's produces and sells a single product. Data concerning that product appear below:
Per Unit
Percent of Sales
Selling price
$160
100%
Variable expenses
80
50%
Contribution margin
$ 80
50%
The company is currently selling 5,200 units per month. Fixed expenses are $359,000 per month. The marketing manager believes that a $6,200 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?
Increase of $13,600
Decrease of $6,200
Increase of $7,400
Decrease of $7,400
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