orporation's data concerning the single product it produces and sells appears below Percent of Sales 100% 30% 70% Selling price Variable expenses Contribution margin Fixed expenses are $490.000 per month. The company is currently selling 6,000 units per month Management is considering using a new part that would increase the unit variable cost by $5. Since the new part would improve the company's product, the manager of marketing predicts that money) sales would increase by 300 units. What should be the overall effect on the company's monthly net operating income from this change? Multiple Choice Per Unit $ 140 42 $.98 increase of $2.300 decrease of $27.900 increase of $27.900 decrease of $2,300
orporation's data concerning the single product it produces and sells appears below Percent of Sales 100% 30% 70% Selling price Variable expenses Contribution margin Fixed expenses are $490.000 per month. The company is currently selling 6,000 units per month Management is considering using a new part that would increase the unit variable cost by $5. Since the new part would improve the company's product, the manager of marketing predicts that money) sales would increase by 300 units. What should be the overall effect on the company's monthly net operating income from this change? Multiple Choice Per Unit $ 140 42 $.98 increase of $2.300 decrease of $27.900 increase of $27.900 decrease of $2,300
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Corporation's data concerning the single product it produces and sells appears below:
Percent of
Sales
100%
30%
70%
Selling price
Variable expenses
Contribution margin
Fixed expenses are $490,000 per month. The company is currently selling 6,000 units per month
Management is considering using a new part that would increase the unit variable cost by $5. Since the new part would improve the company's product, the manager of marketing predicts that money
sales would increase by 300 units. What should be the overall effect on the company's monthly net operating income from this change?
Multiple Choice
C
Per Unit
$ 140
42
$ 98
increase of $2300
decrease of $27,900
increase of $27.900
decrease of $2300
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