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TEST-54 (QUESTION :- 21) Kuzio Corporation produces and sells a single product. Data concerning that product appear below. Per Unit Percent of Sales Selling price Variable expenses Contribution margin $130 100% $78 $52 60% 40% The company is currently selling 6,800 units per month. Fixed expenses are $180,000 per month. The marketing manager believes that a $8,000 increase in the monthly advertising budget would result in a 200-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 $2,400. b. Increase of $10,400. c. Decrease of $8,000. d. Decrease of $2,400.

TEST-54 (QUESTION :- 21) Kuzio Corporation produces and sells a single product. Data concerning that product appear below. Per Unit Percent of Sales Selling price Variable expenses Contribution margin $130 100% $78 $52 60% 40% The company is currently selling 6,800 units per month. Fixed expenses are $180,000 per month. The marketing manager believes that a $8,000 increase in the monthly advertising budget would result in a 200-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 $2,400. b. Increase of $10,400. c. Decrease of $8,000. d. Decrease of $2,400.

FINANCIAL ACCOUNTING
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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TEST-54 (QUESTION :- 21) Kuzio Corporation produces and sells a single product. Data concerning that product appear below. Per Unit Percent of Sales Selling price Variable expenses Contribution margin $130 100% $78 $52 60% 40% The company is currently selling 6,800 units per month. Fixed expenses are $180,000 per month. The marketing manager believes that a $8,000 increase in the monthly advertising budget would result in a 200-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 $2,400. b. Increase of $10,400. c. Decrease of $8,000. d. Decrease of $2,400.
Transcribed Image Text:TEST-54 (QUESTION :- 21) Kuzio Corporation produces and sells a single product. Data concerning that product appear below. Per Unit Percent of Sales Selling price Variable expenses Contribution margin $130 100% $78 $52 60% 40% The company is currently selling 6,800 units per month. Fixed expenses are $180,000 per month. The marketing manager believes that a $8,000 increase in the monthly advertising budget would result in a 200-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 $2,400. b. Increase of $10,400. c. Decrease of $8,000. d. Decrease of $2,400.
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