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: Percent o Per Unit Sales Selling price Variable expenses $150 45 100% 30% Contribution margin $105 70% Fixed expenses are $358,000 per month. The company is currently selling 5,300 units per month. The marketing manager believes that a $15,000 increase in the monthly advertising budget would result in a 190 unit increase in monthly sales. Required: What should be the overall effect on the company's monthly net operating income of this change? (Negative amount should be indicated by a minus sign. Omit the "$" sign in your response.) Change in net operating income

Explanation / Answer

Change in net operating income = (190*105)-15000= 4950

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