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Calculate the new net income or loss

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Mike's Motorcycles - The company's owner has seen some indications of a slowdown in sales after several years of business success. They decided to increase the advertising budget by 10% and reduce sales prices by 4%. The following partial income statement shows the company's results for the most recent quarter:

Sales                                    $800,000.00

Less: Variable costs             $560,000.00

Contribution Margin            $240,000.00

Less Fixed costs                   $175, 000.00

Net Operating Income        $65,000.00

If the advertising budget was $30,000 for the quarter and was included in the fixed costs, calculate the new net income or loss if the changes are made?

Reference no: EM131738620

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