82. Cobble Corporation produces and sells a single product. Data concerning that product appear below: Per Unit $160 Percent of Sales 100% Selling price Variable expenses 48 30% Contribution margin $ 112 70% Fixed expenses are $499,000 per month. The company is currently selling 5,000 units per month. The marketing manager would like to cut the selling price by $13 and increase the advertising budget by $33,000 per month. The marketing manager predicts that these two changes would increase monthly sales by 900 units. What should be the overall effect on the company's monthly net operating income of this change? A) increase of $56,100 B) decrease of $8,900 C) increase of $99,300 D) decrease of $56.100

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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What should be the overall effect onthe company's monthly net operating income of this change?
And why didn't the variable expenses changed?

82. Cobble Corporation produces and sells a single product. Data concerning that product appear below:
Per Unit
$160
Percent of Sales
100%
Selling price
Variable expenses
Contribution margin
48
30%
$ 112
70%
Fixed expenses are $499,000 per month. The company is currently selling 5,000 units per month. The marketing manager
would like to cut the selling price by $13 and increase the advertising budget by $33,000 per month. The marketing
manager predicts that these two changes would increase monthly sales by 900 units. What should be the overall effect on
the company's monthly net operating income of this change?
A) increase of $56,100
B) decrease of $8,900
C) increase of $99,300
D) decrease of $56,100
Transcribed Image Text:82. Cobble Corporation produces and sells a single product. Data concerning that product appear below: Per Unit $160 Percent of Sales 100% Selling price Variable expenses Contribution margin 48 30% $ 112 70% Fixed expenses are $499,000 per month. The company is currently selling 5,000 units per month. The marketing manager would like to cut the selling price by $13 and increase the advertising budget by $33,000 per month. The marketing manager predicts that these two changes would increase monthly sales by 900 units. What should be the overall effect on the company's monthly net operating income of this change? A) increase of $56,100 B) decrease of $8,900 C) increase of $99,300 D) decrease of $56,100
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