Kuzio Corporation produces and sells a single product. The data related to that product appears below: Per
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Kuzio Corporation produces and sells a single product. The data related to that product appears below:
Per unit | Percentage of sales | ||||||||||
Sale price | ps | 140 | 100 | % | |||||||
Variable expends | 84 | 60 | % | ||||||||
Contribution margin | ps | 56 | 40 | % | |||||||
The company currently sells 6,700 units per month. Fixed expenses are $180,000 per month. The marketing manager believes that a $7,000 increase in the monthly advertising budget would result in a 170-unit increase in monthly sales.
What should be the overall effect of this change on the company's monthly net operating income?
Related Book For
Managerial Accounting for Managers
ISBN: 978-1259578540
4th edition
Authors: Eric Noreen, Peter Brewer, Ray Garrison
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