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Question: Data concerning Lemelin Corporation's single product appear below: Per Unit Percent of Sales Selling price $ 230 100% Variable expenses 115 50% Contribution margin $ 115 50% The company is currently selling 7,000 units per month. Fixed expenses are $581,000 per month.
Management is considering using a new component that would increase the unit variable cost by $3. Since the new component would increase the features of the company's product, the marketing manager predicts that monthly sales would increase by 200 units. What should be the overall effect on the company's monthly net operating income of this change?
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Australian post on how the managerial issues identified can be tackled or how the organisation concerned can improve its performance.
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