Question: Data concerning Lemelin Corporation's single product appear below: Per UnitPercent of SalesSelling price$ 2 3 0 1 0 0 % Variable expenses 1 1 5

Data concerning Lemelin Corporation's single product appear below:
Per UnitPercent of SalesSelling price$ 230100%Variable expenses11550%Contribution margin$ 11550%
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?
Multiple Choice
increase of $118,200
increase of $302,200
decrease of $118,200
decrease of $7,800

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