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What the overall effect on company monthly operating income

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Reference no: EM131751401

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

  Per Unit Percent of Sales
  Selling price $160    100%    
  Variable expenses

80   

50%    
  Contribution margin

$ 80   

50%    

The company is currently selling 6,200 units per month. Fixed expenses are $440,200 per month. The marketing manager believes that a $6,800 increase in the monthly advertising budget would result in a 120 unit increase in monthly sales. What should be the overall effect on the company's monthly net operating income of this change?

Increase of $9,600

Decrease of $2,800

Decrease of $6,800

Increase of $2,800

Reference no: EM131751401

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