Data concerning Marchman Corporation's single product appear below: The company is currently selling 4,000 units per month. Fixed expenses are $166,000 per month. Consider each of the following questions independently. This question is to be considered independently of all other questions relating to Marchman Corporation. Refer to the original data when answering this question.
The marketing manager would like to cut the selling price by $7 and increase the advertising budget by $11,000 per month. The marketing manager predicts that these two changes would increase monthly sales by 800 units. What should be the overall effect on the company's monthly net operating income of this change?
A)increase of $21,800
B)decrease of $21,800
C)increase of $79,400
D)decrease of $6,200

Question

Data concerning Marchman Corporation's single product appear below:  The company is currently selling 4,000 units per month. Fixed expenses are $166,000 per month. Consider each of the following questions independently. This question is to be considered independently of all other questions relating to Marchman Corporation. Refer to the original data when answering this question.
The marketing manager would like to cut the selling price by $7 and increase the advertising budget by $11,000 per month. The marketing manager predicts that these two changes would increase monthly sales by 800 units. What should be the overall effect on the company's monthly net operating income of this change?
A)increase of $21,800 
B)decrease of $21,800 
C)increase of $79,400 
D)decrease of $6,200

Quizplus · Accepted Answer

The Answer of Data concerning Marchman Corporation's single product appear below:  The company is currently selling 4,000 units per month. Fixed expenses are $166,000 per month. Consider each of the following questions independently. This question is to be considered independently of all other questions relating to Marchman Corporation. Refer to the original data when answering this question.
The marketing manager would like to cut the selling price by $7 and increase the advertising budget by $11,000 per month. The marketing manager predicts that these two changes would increase monthly sales by 800 units. What should be the overall effect on the company's monthly net operating income of this change?
A)increase of $21,800 
B)decrease of $21,800 
C)increase of $79,400 
D)decrease of $6,200

Data Concerning Marchman Corporation's Single Product Appear Below: the Company