Data concerning Runnells Corporation's single product appear below: Per Unit % of Sales Selling Price.. $160 100% Variable Expenses. $80 50% Contribution Margin. $80 50% The company is currently selling 6,000 units per month. Fixed expenses are $424,000 per month. The marketing manager believes that a $7,000 increase budget would result in a 100 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 $8,000 B. Decrease of $1,000 C. Increase of $1,000 D. Decrease of $7,000 the monthly advertising

Data concerning Runnells Corporation's single product appear below: Per Unit % of Sales Selling Price.. $160 100% Variable Expenses. $80 50% Contribution Margin. $80 50% The company is currently selling 6,000 units per month. Fixed expenses are $424,000 per month. The marketing manager believes that a $7,000 increase budget would result in a 100 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 $8,000 B. Decrease of $1,000 C. Increase of $1,000 D. Decrease of $7,000 the monthly advertising

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter3: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 6EB: Kerr Manufacturing sells a single product with a selling price of $600 with variable costs per unit...

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[The following information applies to the questions displayed below.] Data for Hermann Corporation are shown below: Selling price Variable expenses Contribution margin Per Unit $ 125 80 $ 45 Fixed expenses are $85,000 per month and the company is selling 2,700 units per month. Req 1A Required: 1-a. How much will net operating income increase (decrease) per month if the monthly advertising budget increases by $9,000, the monthly sales volume increases by 100 units, and the total monthly sales increase by $12,500? 1-b. Should the advertising budget be increased? Reg 1B Percent of Sales Complete this question by entering your answers in the tabs below. 100% 64 36% by How much will net operating income increase (decrease) per month if the monthly advertising budget increases by $9,000, the monthly sales volume increases by 100 units, and the total monthly sales increase by $12,500? Note: Do not round intermediate calculations. Net operating income Req 1A Req 1B >
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