Calculate the change in total contribution margin

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Reference no: EM132218571

Question - Compute the following data based off information given?

The marketing manager argues that a $5,000 increase in the monthly advertising budget would increase monthly sales by $9,000.

Calculate the increase or decrease in net operating income.

1-b. Should the advertising budget be increased? YES OR NO.

2-a. Refer to the original data. Management is considering using higher-quality components that would increase the variable expense by $2 per unit. The marketing manager believes that the higher-quality product would increase sales by 10% per month. Calculate the change in total contribution margin.

2-b. Should the higher-quality components be used? YES OR NO.

Reference no: EM132218571

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