Bethard corporation produces and sells a single product. Data concerning that pr

Question

Bethard corporation produces and sells a single product. Data concerning that product below: Fixed expenses arc $354,000 per month. The company is currently selling 5,000 units per month. The marketing manager would like to cut the selling price by $8 and increase the advertising budget by $23,000 per month. The marketing manager predicts that these two changes would increase monthly sales by 600 units. What should be the overall effect on the company's monthly net operating income of this change? Show your work!

Explanation / Answer

Amount($) Before Change Particulars Amount Sales        6,00,000 Less:variable Expenses        1,20,000 Contibution        4,80,000 Less:Fixed Cost        3,54,000 Net operating Income        1,26,000 After Changes Particulars Amount Sales 627200 Less:Variable Cost 134400 Contribution 492800 Less:Fixed Cost 354000 Less:Advertising Expenses 23000 Net operating Income        1,15,800 Net operating Income decrease by            10,200

Related Questions

Navigate

• Browse (All)
• Browse B
• Subjects

---

---

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