Dybala Corporation produces and sells a single product. Data concerning that product appear below: The company is currently selling 5,000 units per month. Fixed expenses are $173,000 per month. The marketing manager believes that a $6,000 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?
A)increase of $1,480
B)decrease of $6,000
C)increase of $7,480
D)decrease of $1,480

Question

Dybala Corporation produces and sells a single product. Data concerning that product appear below:  The company is currently selling 5,000 units per month. Fixed expenses are $173,000 per month. The marketing manager believes that a $6,000 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?
A)increase of $1,480 
B)decrease of $6,000 
C)increase of $7,480 
D)decrease of $1,480

Quizplus · Accepted Answer

The Answer of Dybala Corporation produces and sells a single product. Data concerning that product appear below:  The company is currently selling 5,000 units per month. Fixed expenses are $173,000 per month. The marketing manager believes that a $6,000 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?
A)increase of $1,480 
B)decrease of $6,000 
C)increase of $7,480 
D)decrease of $1,480

Dybala Corporation Produces and Sells a Single Product