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What should be the overall effect on net operating income

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

Per Unit Percent of Sales

Selling price $ 150 100%

Variable expenses 60 40%

Contribution margin $ 90 60%

Fixed expenses are $355,000 per month. The company is currently selling 5,000 units per month.

The marketing manager believes that a $12,000 increase in the monthly advertising budget would result in a 160 unit increase in monthly sales. What should be the overall effect on the company's monthly net operating income of this change?

Reference no: EM131831719

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