Once again here is drake companys income statement

Reference no: EM131022844

Once again here is Drake Company's income statement for the most recent year:

Sales (26,000 units)...........................	$650,000
Less: Variable expenses..................	442,000
Contribution margin..........................	208,000
Less: Fixed expenses........................	234,000
Net operating loss.............................	$ (26,000)

Drake’s sales manager is convinced that if the company had made an additional $60,000 expenditure on advertising (fixed cost), the company's sales would have increased by 13,000 units and $325,000. If he is correct, the company's net operating income would have amounted to a total of:

1.	$44,000
2.	$18,000
3.	$239,000

Reference no: EM131022844

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