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What should be the overall effect on the company income

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Question - Shelhorse Corporation produces and sells a single product. Data concerning that product appear below:

Per Unit Percent of Sales

Selling price $160 100%

Variable expenses $40 25%

Contribution margin $120 75%

Fixed expenses are $345,000 per month. The company is currently selling 4,000 units per month.

Required - The marketing manager believes that a $14,000 increase in the monthly advertising budget would result in a 140 unit increase in monthly sales. What should be the overall effect on the company's monthly net operating income of this change?

Reference no: EM132932361

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