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Compute the monthly increase in operating income

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Reference no: EM133036900

Question - Montclair Company earns an average contribution margin ratio of 40% on its sales. The local store manager estimates that he can increase monthly sales volume by $45,000 by spending an additional $7,000 per month for direct mail advertising. Compute the monthly increase in operating income if the manager's estimate about the increased sales volume is accurate.

a. $23,000

b. $18,000

c. $16,000

d. $11,000

Reference no: EM133036900

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