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What the overall effect on the company operating 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 $100 100% Variable expenses 30 30% Contribution margin $70 70%

Fixed expenses are $356,000 per month. The company is currently selling 5,100 units per month.

Required - The marketing manager believes that a $13,000 increase in the monthly advertising budget would result in a 250 unit increase in monthly sales. What should be the overall effect on the company's monthly net operating income of this change?

Reference no: EM132595597

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