Zeeb Corporation produces and sells a single product. Data concerning that produ

Question

Zeeb Corporation produces and sells a single product. Data concerning that product appear below: Fixed expenses are $366,000 per month. The company is currently selling 6.100 units per month. The marketing manager believes that a $23,000 increase in the monthly advertising budget would result in a 150 unit increase in monthly sales. What should be the overall effect on the company's monthly net operating income of this change? (Negative amount should be indicated by a minus sign. Omit the "$" sign in your response.)

Explanation / Answer

Before Advertisement After advertisement Number of units sold 6100 6250 Contribution margin per unit $169 $169 Total contribution $1,030,900 $1,056,250 Less: Fixed cost $366,000 $389,000 Net operating income $664,900 $667,250 Change in net operating income $2,350 Overal, effect on the companys monthly net operating income of this change is Increase $2,350 Change in net operating income 2,350.00

Related Questions

Navigate

• Browse (All)
• Browse Z
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.