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Find what should be overall effect on the company monthly

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Reference no: EM132509690

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

                              Per Unit            Percent of Sales

Selling price          $220                      100 %

Variable expenses        66              30%

Contribution margin        $154            70%

  • Fixed expenses are $362,000 per month. The company is currently selling 5,700 units per month.

Required:

Question 1: The marketing manager believes that a $19,000 increase in the monthly advertising budget would result in a 130 unit increase in monthly sales. What should be the overall effect on the company's monthly net operating income of this change?

Reference no: EM132509690

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