The selling price is $120 per unit. The yariable cost is $78 per unit. Fixed expenses are $249,480 per month. The company is currently selling 6,000 units. The marketing manager thinks that increasing the advertising by $10,000 would generate a 10% increase in monthly sales. If these changes are made, what is the change (how much more income will result ) in net income? O $25,620 O $25,200 O $15,200 O $15,620

FINANCIAL ACCOUNTING
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ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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The marketing manager thinks that increasing the advertising by $10,000 would generate a 10% increase in monthly sales. If these changes are made, what is the change (how much more income will result ) in net
income?
The selling price is $120 per unit. The variable cost is $78 per unit. Fixed expenses are $249,480 per month. The company is currently selling 6,000 units.
O $25,620
O $25,200
O $15,200
O $15,620
Transcribed Image Text:The marketing manager thinks that increasing the advertising by $10,000 would generate a 10% increase in monthly sales. If these changes are made, what is the change (how much more income will result ) in net income? The selling price is $120 per unit. The variable cost is $78 per unit. Fixed expenses are $249,480 per month. The company is currently selling 6,000 units. O $25,620 O $25,200 O $15,200 O $15,620
Expert Solution
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Contribution margin per unit  represents the portion of sales revenue that is not consumed by variable costs and so contributes to the coverage of fixed costs.

 

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