XYZ Company earns an avg Contribution Margin Ratio of 40% on its sales.  The store mgr estimates that monthly sales will increase by $45,000 by spending an additional 7,000 monthly for direct mail ads.  Compute the monthly increase in operating income if the manager's estimate about the increased sales volume is accurate.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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XYZ Company earns an avg Contribution Margin Ratio of 40% on its sales.  The store mgr estimates that monthly sales will increase by $45,000 by spending an additional 7,000 monthly for direct mail ads.  Compute the monthly increase in operating income if the manager's estimate about the increased sales volume is accurate.

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