What is the effect on operating income

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Question - Craylon Manufacturing produces a single product that sells for 130 . Variable costs per unit equal 30. The company expects total fixed costs to be 65,000 for the next month at the projected sales level of 1500 units. In an attempt to improve performance, management is considering a number of alternative actions. Each situation is to be evaluated separately. One alternative to increase advertising expenses by 13,000. What is the effect on operating income with the increase of advertising expenses?

A. Operating income will increase by $ 13,000.

B. Operating income will decrease by $ 13,000.

C. Operating income will increase by $ 72,000.

D. Operating income will decrease by $ 72,000.

Reference no: EM132565139

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