Zeeb Corporation produces and sells a single product. Data concerning that product appear below:
|
Per Unit |
Percent of Sales |
| Selling price |
|
$ |
600 |
|
|
100 |
% |
|
| Variable expenses |
|
|
240 |
|
|
40 |
% |
|
|
|
|
|
|
|
|
|
|
| Contribution margin |
|
$ |
360 |
|
|
60 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Fixed expenses are $430,000 per month. The company is currently selling 20,000 units per month.
|
|
Required:
|
|
The marketing manager believes that a $30,000 increase in the monthly advertising budget would result in a 310 unit increase in monthly sales. What should be the overall effect on the company's monthly net operating income of this change?
|