Question - Dybala Corporation's produces and sells a single product. Data concerning that product appear below:
| |
Per Unit |
Percent of Sales |
| Selling price |
$160 |
100% |
| Variable expenses |
80
|
50%
|
| Contribution margin |
$ 80
|
50%
|
The company is currently selling 6,200 units per month. Fixed expenses are $440,200 per month. The marketing manager believes that a $6,800 increase in the monthly advertising budget would result in a 120 unit increase in monthly sales. What should be the overall effect on the company's monthly net operating income of this change?
Increase of $9,600
Decrease of $2,800
Decrease of $6,800
Increase of $2,800