Question: Data concerning Runnells Corporation's single and sells a product. Data co cerning that product appear below: Per Unit Percent of Sales Selling price $160 100%

Data concerning Runnells Corporation's single and sells a product. Data co cerning that product appear below:

Per Unit Percent of Sales
Selling price $160 100%
Variable expenses

80

50%

Contribution margin

$ 80

50%

The company is currently selling 6,500 units per month. Fixed expenses are $464,500 per month. The marketing manager believes that a $6,500 increase in the monthly advertising budget would result in a 150 unit increase in monthly sales. What should be the overall effect on the company's monthly net operating income of this change?

Increase of $5,500

Increase of $12,000

Decrease of $5,500

Decrease of $6,500

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