Tentative budget-increase in budgeted net operating income

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Reference no: EM13906045

Sun Company's tentative budget for next year is as follows: Sales ........................................................... $600,000 Variable expenses ...................................... 360,000 Fixed expenses: Manufacturing ........................................ 90,000 Selling and administrative ...................... 110,000 Net operating income ............................. $40,000 Mr. Johnston, the marketing manager, has proposed an aggressive advertising campaign costing an additional $50,000 that he predicts will result in a 30% unit sales increase. Assuming that Johnston's proposal is incorporated into the budget, what should be the increase in the budgeted net operating income for next year?

A) $12,000 B) $22,000 C) $72,000 D) $130,000

Reference no: EM13906045

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