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What should be the overall effect on the company monthly

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Reference no: EM132721019

Bethard Corporation produces and sells a single product. Data concerning that product appear below:

Selling price $120 per unit
Variable expenses 24 per unit
Contribution margin $96 per unit

Fixed expenses are $354,000 per month. The company is currently selling 5,000 units per month.

Required:

Problem 1: The marketing manager would like to cut the selling price by $10 and increase the advertising budget by $10,000 per month. The marketing manager predicts that these two changes would increase monthly sales by 800 units. What should be the overall effect on the company's monthly net operating income of this change?

Reference no: EM132721019

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