Question: Data concerning Hochul Corporation's single product appear below: Per Unit Percent of Sales Selling price $ 100 100% Variable expenses 44 44% Contribution margin $

Data concerning Hochul Corporation's single product appear below:

	Per Unit	Percent of Sales
Selling price	$ 100	100%
Variable expenses	44	44%
Contribution margin	$ 56	56%

Fixed expenses are $440,000 per month. The company is currently selling 8,000 units per month. Required: a)The marketing manager believes that an $18,000 increase in the monthly advertising budget would result in a 160 unit increase in monthly sales. What should be the overall effect on the company's monthly net operating income of this change?

b)How will this proposed change affect the contribution margin ratio ?

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