The EV78568 company has provided the following cost, price, and sales data: Per Unit Selling price 246 Variable 57 expenses Contribution 189 margin The EV78568 company is currently selling 8,600 units per month. Fixed expenses are $874,000 per month. The marketing manager would like to cut the selling price by $31 and increase advertising spending by $69,000 per month. The marketing manager predicts that these changes would increase monthly sales quantity by 20%. What would be the overall effect on the EV78568 company's monthly net operating income of this change? (Note: A POSITIVE number indicates an INCREASE in net operating income, and a NEGATIVE number indicates a DECREASE in net operating income) Multiple Choice 38,240 dollars -10,752 dollars -63,840 dollars 25,528 dollars
The EV78568 company has provided the following cost, price, and sales data: Per Unit Selling price 246 Variable 57 expenses Contribution 189 margin The EV78568 company is currently selling 8,600 units per month. Fixed expenses are $874,000 per month. The marketing manager would like to cut the selling price by $31 and increase advertising spending by $69,000 per month. The marketing manager predicts that these changes would increase monthly sales quantity by 20%. What would be the overall effect on the EV78568 company's monthly net operating income of this change? (Note: A POSITIVE number indicates an INCREASE in net operating income, and a NEGATIVE number indicates a DECREASE in net operating income) Multiple Choice 38,240 dollars -10,752 dollars -63,840 dollars 25,528 dollars
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:The EV78568 company has provided the following cost, price, and sales data:
Per Unit
Selling price
$
246
Variable
57
expenses
Contribution
$
189
margin
The EV78568 company is currently selling 8,600 units per month. Fixed expenses are $874,000 per month.
The marketing manager would like to cut the selling price by $31 and increase advertising spending by $69,000 per month. The marketing manager predicts that these changes would increase monthly sales quantity by
20%. What would be the overall effect on the EV78568 company's monthly net operating income of this change?
(Note: A POSITIVE number indicates an INCREASE in net operating income, and a NEGATIVE number indicates a DECREASE in net operating income)
Multiple Choice
38,240 dollars
-10,752 dollars
-63,840 dollars
25,528 dollars
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