Laro Corporation produces and sells a single product with the following characte

Question

Laro Corporation produces and sells a single product with the following characteristics: The company is currently selling 5,000 units per month. Fixed expenses are $302,000 per month. Consider each of the following questions independently.

This question is to be considered independently of all other questions relating to Laro Corporation. Refer to the original data when answering this question.

he marketing manager believes that a $7,000 increase in the monthly advertising budget would result in a 110 unit increase in monthly sales.

What should be the overall effect on the company's monthly net operating income of this change?

A) Increase of $1,250

B) Decrease of $7,000

C) Decrease of $1,250

D) Increase of $8,250

Explanation / Answer

a

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