Data concerning Runnells Corporation's single product appear below: Per Unit % of Sales Selling Price.. $160 100% Variable Expenses. $80 50% Contribution Margin. $80 50% The company is currently selling 6,000 units per month. Fixed expenses are $424,000 per month. The marketing manager believes that a $7,000 increase budget would result in a 100 unit increase in monthly sales. What should be the overall effect on the company's monthly net operating income of this change? A. Increase of $8,000 B. Decrease of $1,000 C. Increase of $1,000 D. Decrease of $7,000 the monthly advertising

Data concerning Runnells Corporation's single product appear below: Per Unit % of Sales Selling Price.. $160 100% Variable Expenses. $80 50% Contribution Margin. $80 50% The company is currently selling 6,000 units per month. Fixed expenses are $424,000 per month. The marketing manager believes that a $7,000 increase budget would result in a 100 unit increase in monthly sales. What should be the overall effect on the company's monthly net operating income of this change? A. Increase of $8,000 B. Decrease of $1,000 C. Increase of $1,000 D. Decrease of $7,000 the monthly advertising

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Data concerning Wislocki Corporation's single product appear below: Selling price Variable expenses Contribution margin Per Unit Percent of Sales $ 150 36 100% 24% $ 114 76% Fixed expenses are $1,042,000 per month. The company is currently selling 9,700 units per month. Required: The marketing manager would like to introduce sales commissions as an incentive for the sales staff. The marketing manager has proposed a commission of $12 per unit. In exchange, the sales staff would accept an overall decrease in their salaries of $104,000 per month. The marketing manager predicts that introducing this sales incentive would increase monthly sales by 330 units. What should be the overall effect on the company's monthly net operating income of this change? Change in net operating income
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