Evans Company has estimated the following amounts for its next fiscal year:

If the company spends an additional $30,000 on advertising, sales volume would increase by 2,500 units. What effect will this decision have on the operating income of Evans?

A) Operating income will decrease by $62,500.

B) Operating income will increase by $7,500.

C) Operating income will increase by $70,000

D) Operating income will increase by $37,500.

Transcribed Image Text:

Total fixed expenses $832,500 Sale price per unit 40 Variable expenses per unit 25 Total fixed expenses $832,500 Sale price per unit 40 Variable expenses per unit 25

Answer rating: 100% (QA)

B Operating income will increase by 7500 ... View the full answer