UKJPQX588 Corp. has provided the following cost, price, and sales data: Selling price $ Variable expenses Contribution margin $ (ID#87952) UKJPQX588 is currently selling 6,400 units per month. UKJPQX588's Fixed expenses are $896,000 per month. Multiple Choice UKJPQX588's sales manager is planning to cut the selling price by $20 and increase advertising spending by $36,000 per month. UKJPQX588's manager above believes that these changes would increase monthly sales quantity by 20%. O (Baruch College Exam) Q) What would be the overall effect on UKJPQX588'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) Per Unit 44,768 dollars 224 46 178 -6,920 dollars -10,752 dollars
UKJPQX588 Corp. has provided the following cost, price, and sales data: Selling price $ Variable expenses Contribution margin $ (ID#87952) UKJPQX588 is currently selling 6,400 units per month. UKJPQX588's Fixed expenses are $896,000 per month. Multiple Choice UKJPQX588's sales manager is planning to cut the selling price by $20 and increase advertising spending by $36,000 per month. UKJPQX588's manager above believes that these changes would increase monthly sales quantity by 20%. O (Baruch College Exam) Q) What would be the overall effect on UKJPQX588'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) Per Unit 44,768 dollars 224 46 178 -6,920 dollars -10,752 dollars
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question

Transcribed Image Text:**UKJPQX588 Corp. Cost, Price, and Sales Data**
**Per Unit:**
- **Selling price:** $224
- **Variable expenses:** $46
- **Contribution margin:** $178
---
- **Current Sales:** UKJPQX588 is selling 6,400 units per month.
- **Fixed Expenses:** $896,000 per month.
---
**Proposed Changes:**
- The sales manager plans to reduce the selling price by $20.
- Increase advertising spending by $36,000 per month.
- It is believed these changes will increase monthly sales quantity by 20%.
**Question:**
What would be the overall effect on UKJPQX588’s monthly net operating income due to 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 Options:**
- $44,768 dollars
- -$6,920 dollars
- -$10,752 dollars
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