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What should be the overall effect on the income

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Reference no: EM132932819

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

Per Unit Percent of Sales

Selling price $250 100%

Variable expenses $100 40%

Contribution margin $150 60%

Fixed expenses are $353,000 per month. The company is currently selling 4,800 units per month.

Required - The marketing manager believes that a $22,000 increase in the monthly advertising budget would result in a 180 unit increase in monthly sales. What should be the overall effect on the company's monthly net operating income of this change?

Reference no: EM132932819

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