Question: Dorm Supplies Co . sells a single Dorm Package with a 5 0 % CM ratio and a sales price of $ 2 3 0

Dorm Supplies Co. sells a single Dorm Package with a 50% CM ratio and a sales price of $230 per unit. 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 companys monthly net operating income of this change?

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