Clean Company reported the following information on its current-year contribution margin income statement:

a. The marketing department suggests that a new advertising campaign costing $15,000 can increase the contribution margin by 10%. What is the net effect on operating income? Ignore the effect of taxes.

b. Refer to the facts in part (a). As the chief financial officer, what support would you seek for the marketing department projections? What other information is relevant to the decision to launch the campaign?

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Fixed costs Sales Contribution margin Income taxes $120,000 $300,000 $180,000 $15,000