Question: Data concerning Lemelin Corporation's single product appear below: Per Unit Percent of Sales Selling price $ 230 100% Variable expenses 115 50% Contribution margin $

Data concerning Lemelin Corporation's single product appear below:

	Per Unit	Percent of Sales
Selling price	$ 230	100%
Variable expenses	115	50%
Contribution margin	$ 115	50%

The company is currently selling 7,000 units per month. Fixed expenses are $581,000 per month.

The marketing manager would like to cut the selling price by $18 and increase the advertising budget by $37,000 per month. The marketing manager predicts that these two changes would increase monthly sales by 1,600 units. What should be the overall effect on the company's monthly net operating income of this change?

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